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Understanding E-commerce?

A combination of devastating advantages. It's global, so the Company that exploits the Internet potentially has global reach. The Internet never sleeps. Every second of every day, it can be serving your business (and your competitors'), while you sleep. Individuals who surf the net are volunteers, so the Internet provides access to large numbers of people who have already declared an interest in what you sell, currently at a fraction of the cost of conventional publicity and advertising. To businesses operating legacy systems, web technology offers a standard means to integrate disparate information sources and extract more value from their data, by using standardised and relatively inexpensive resources.

The cost of entry on the Internet can be very low compared to starting a conventional business. Instead of requiring a prime physical site to impress customers, the web business can be located anywhere at the lowest cost - it doesn't even have to be on the same Continent as its customers. For processing and transmitting transaction information, the Internet is the fastest publicly available medium available.

It is these advantages that make the Internet so attractive and deadly if you're caught unawares.

E-business produces a different interface to both customers and suppliers, and must have different back-office systems to support it. You have to consider customer care and support issues, returns and refunds, and a host of related matters.

The most advantageous use of the Internet requires a fresh look at every business practice you engage in, including questioning what markets you should be in and where.

The much-quoted Amazon.com is not just another bookshop that happens to work on the Web. They offer comprehensive search facilities, which the medium naturally supports. They provide reviews and contents lists. They tell you what's in stock and if not how long it will take to get a particular title. They discount, and deliver quickly. If you are shopping for content rather than beauty, this is arguably more convenient and a better service than the conventional bookshop.

Amazon.com was never a conventional bookseller. It came from nowhere, and its turnover is currently measured in 9 figures. The shares are worth rather more.

Parcels company UPS made it possible for customers to obtain documentation, book deliveries, and track them on the web. Customers liked this differentiating move a lot, and it saved money for UPS at the same time.

These are just three out of hundreds of possible examples of innovative thinking which has led to competitive advantage using the Internet.

What are the Watchwords for exploiting the Internet?

  • Don't underestimate the extent of the changes in business the Internet is driving.
  • Pre-Internet you knew who your competitors were. Now, for most businesses they can be anyone on the planet.
  • The Internet invites geographical extension; many businesses will do it by alliances, mergers and acquisitions.
  • The pace of change will increase further, partly because innovations are easy to imitate.

Consider the opportunities

  • The Internet is a new route to market, in certain ways more efficient than any other. The question is, how to exploit it?
  • New types of business are possible with the Internet.
  • In some types of business, new products can be rolled out faster, more easily and for less cost.
  • Niche markets can be established by using the much richer information that can be collected by trading on the net.
  • You've been doing things the same way for years. The net is a wonderful stimulus for re-thinking and re-engineering to give a better service and strip out cost.

Be wary of the pitfalls

  • Don't let the technology fool you into forgetting why you are setting out on the Internet. Have a reasoned plan and stick to it.
  • The web is a new interface, so don't overlook the need to provide service, quality, ease-of-use, courtesy and so on. Neither over look the need to make it interesting and visually appealing.
  • Remember you have to keep your public face up-to-date - "Complacency will be quickly rewarded by someone overtaking you."
  • Try not to think in isolationist terms; find out what your suppliers, customers and competitors are doing about E-commerce.
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