Companies Must Think Ahead: What Was Hip Then is Not What Customers Want Today

Companies Must Think Ahead: What Was Hip Then is Not What Customers Want Today

As we look back at the last two decades of e-commerce, we have seen major shifts in the way companies are doing business online. Companies that succeed are constantly reshaping and re-evaluating their e-business plans. Companies such as Dell, E-Bay, and Amazon.com, among many others, stay ahead of the curve in e-commerce by being committed to never-ending improvement.

Companies that become leaders in e-commerce offer better services, redefine their position in the marketplace, research customer buying trends, partner with companies, and take advantage of technological changes.

  • 'Playing to Win' by A.G. Lafley and Roger Martin (ISBN 142218739X) Dell was one of the first companies to reap the benefits of e-commerce. Dell continually improves their Web site to include more personalization and one-to-one relationships with customers. They increase online customer service and expand their business to provide benefit services. More than 40 percent of the company’s revenue comes from online sales. Last year they generated $15 million per day of revenue online; this year they expect to generate half their revenue online. Dell attributes their success to customer service and providing a personalized experience for their shoppers. This year they invested $26 million into Site-Smith, a fast-growing application service provider. Dell entered into the ASP market as part of its efforts to expand into new markets and increase revenue stream beyond selling computers online. Their goal is to increase infrastructure services using the ASP business model. Another initiative, Dell Ventures, will focus on making strategic investments in early-stage private companies. Dell is also offering clients value-added services such as Web design and e-commerce storefronts.
  • EBay, with a simple concept (web-based auctions) and a market capitalization of $16 billion, has harnessed the resources of the Internet to capture over two million registered users—and have never stopped looking ahead. EBay is constantly looking for ways to increase their markets by providing international sites and moving into new markets. This year, eBay collaborated with zipReality.com to provide a new category of products and services called eBay Real Estate. Although eBay is a brand name for auctioning online, they keep moving forward and thinking of next steps to stay ahead of the market.
  • Amazon.com is another online company that is constantly improving their business practices and strategies. Branded on the Internet as a major bookseller, Amazon.com is selling other products such as lawn, patio, and kitchen products. One of their key innovations is the 1-Click ordering. Once customers have registered or made a purchase online, they can select the 1-Click ordering. This will automatically select all of the previously entered billing and shipping information. Amazon.com realized that their market was based on convenience and impulse buying. So, they used technology to allow their customers to bypass all of the billing and shipping forms and focus more on the 1-Click feature.
  • 'Strategy That Works' by Paul Leinwand and Cesare Mainardi (ISBN 162527520X) JCPenney.com has generated over $100 million in sales online. In just the last three years, JCPenney has transformed from including only a few catalogue items online to becoming one of the most visited sites on the Internet. To move ahead, they formed a separate subsidiary called JCP Internet Commerce Solutions, which focuses on their e-commerce presence and catalog. The key to their success was thinking how they could provide the best customer service, fulfillment, and personalization online.
  • Bid.com created an auction-based site focused on business-to-consumer auctions. They wanted to provide a site similar to eBay. The results: they lost substantially. To counter their poor performance, Bid.com revamped their business model toward the business-to-business market. Knowing they had a great auction technology, the company moved to selling its online auction technology and services to other businesses. The business revenue model is now based on implementation fees, monthly hosting fees, and transaction fees from the businesses. Bid.com is now seeing some successes with this new model.

'Your Strategy Needs a Strategy' by Martin Reeves (ISBN 1625275862) We see that “brick and mortar” companies often create a new department or company purely related to e-commerce because customer service, personalization, sales, marketing, and other areas need to be addressed differently. By creating a new division or spin-off company, the right resources and experience can be brought into the company. It is possible to re-train internal people, however, it takes time to shift a large company to think in e-commerce terms.

Since the e-commerce market is still fairly new, companies will need to test what works. You may work for a company that sells ABC products; however, over time you see that the company’s strengths lie in distribution and customer service instead of product sales. So, capitalize on your strengths by providing distribution and customer service for other e-companies.

With the e-commerce field changing, re-evaluate your strategy. Plan your e-commerce strategy.

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