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BeOnTheNet's
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BeOnTheNet's
Electronic Commerce
Newsletter
BeOnTheNet's Electronic Commerce Sentinel Volume 1, Issue 4
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contrib@beonthenet.comIn This Issue:
What are small Businesses really doing on line? And what do these statistics really mean?
News From The Front - Jerry Neece of Sun Microsystems tells us about Sun's Ecommerce experiences and future expectations
Short Notes - A collection of interesting Internet Ecommerce quotes
Ticketmaster Online sales up 270%
Businesses are expected to spend $3.5 billion on Internet direct marketing by 2002.
Internet Consumer Sales expected to reach $2 Billion in 1998 and $6 Billion by 2000.
Consumer Retail Spending to Reach $26 Billion by 2002
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What are small Businesses really doing on line? And what do these statistics really mean?
by Gene McMahon
According to "The 1997 U.S. Small Business Internet Survey" by Cyber Dialogue 2.6 million small businesses ( under 100 employees) are operating online. Yet only 27 percent are actually selling products and/or service via their Web site or email. On the average those who are selling online expect online sales to account for 25% of their sales in 1998 up from 11% in 1997.
You may wonder what is holding the other 73% back? The survey reported these significant obstacles to selling online:
Obstacles to Selling Online
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Lack of time: 31 percent
Online security concerns: 31 percent
Lack of technical expertise: 30 percent
Costs: 17 percent
Management resistance: 7 percent
Our experience with small businesses wanting to do business on line agrees with the study. Since these small businesses are exceedingly entrepreneurial the commitment of time by the owner/mangers is frequently lacking. While they believe the Internet is the right thing to do, the old saying " When you are up to your eyeballs in alligators, it is difficult to remember that your original intention was to drain the swamp!" unfortunately holds true.
Commitment to developing improving and working on their web sites suffers from a lack of priority with many small businesses. We have had a number of "would be online merchants" who have been unable to find the time to:
- Identify the merchandise they want to sell
- Put together pictures, and raw marketing materials of the merchandise for sale
We offer a full suite of turnkey systems including graphics design and copy writing to expedite getting a business operational, yet getting the raw information that we need is frequently like pulling teeth. I believe that the lack of technical expertise is frequently a "subliminal problem" with many business owners. They fully understand every aspect of their business but are reluctant, emotionally, to commit to a technology (i.e.. The Internet) which they do not yet fully understand. in their "gut". They would never dream of opening a branch office or store and then abandoning it. Yet many will put up a web site and then proceed to ignore it.
Success in any business depends upon involvement and hard work. While many small business owners believe that their future lies with the Internet, they frequently have the attitude that they will address it tomorrow. - Guess what ? "Tomorrow never comes"
For example, last summer I was looking for a new property insurance carrier. My current carrier changed their policy on "Hurricane risk" drastically. I searched on the Internet and found five agents in my area. Four of them only had a page and an email address. One had a fairly decent web site. Three of them never responded to an email request. The fourth responded 4 weeks later!
The agency who had a web site responded to my request for information form ( which gave pretty detailed information on what I wanted) one week later. That response was handled by a secretary who could not give me any information or quotes. Two further email requests took 2 days to get a response and still no quote. Finally I got a call from the secretary with a quote but she couldn't answer any question and a follow-up by someone who could never happened. Obviously, in these cases NO ONE WAS MINDING THE STORE! Needless to say, none of them got my business.
When you commit to doing a web site it has to have some priority in getting it done. If you leave it to something you will take care of when you find the time you will probably never find the time. Once it is operational you must do the following:
- Answer your email at least once a day.
- Incorporate your email address and web site address into all of your normal marketing materials.
- Ask your clients for their email addresses and begin to communicate with them via email. You will be amazed at how many of them will appreciate it. And how it will improve your productivity.
Dedicate yourself to giving "First Class" service to your Internet customers. Ultimately success in Cyberspace is no different than in the real world. It will depend on supplying products and service in a better fashion than your competitors. And a well made web site can make that real easy. But only if you fully commit yourself to utilizing it and supporting it..
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News From The Front - Jerry Neece of Sun Microsystems tells us about Sun's Ecommerce experiences and future expectations
The Message below is from Jerry Neece a lifetime marketeer who runs Sun Microsystems sales training programs and is also Adjunct Professor of Electronic Marketing, at Santa Clara University. Jerry tells you how Sun is profiting from the Web now and what they expect in the future.
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From: Jerry Neece <Jerry.Neece@Corp.Sun.COM>
Subject: E-Commerce Projections -- $300B by 2002
The U.S. Commerce Department is understandably conservative in But consider this. By the year 2000, greater than 50% of all Sun Microsystem's orders will be taken electronically and greater than 80% of all purchases will be made electronically. If Sun keeps growing at its current rate (12% per year) Sun itself will do $15 billion in EC revenue the year 2000.
It is our belief that the computer industry itself will do $300 billion in that timeframe and all industries in the U.S. may approach $1 trillion (get used to this word like you're going to have to get used to the word 'petabytes.')
Internally we've noticed a greater than 50 percent reduction in purchasing cycle times which improves our ability to reduce inventory, bring products to market faster, and most importantly, increase customer satisfaction. By pooling our orders at the supplier end (like office products) we've also seen a 10-15% reduction in the cost of items procured over department admins ordering their supplies over the phone at the one lot pricing, as well as increased efficiency and reduced staffing in purchasing, order processing, etc. If you can add one head count, do you want to add a sales rep or a Java developer or do you want to hire a purchasing agent?
This is not rocket science. Electronic Commerce is more about good business sense than whiz-bang technology and that will be the compelling factor in its introduction into businesses of all types and sizes.
- Jerry Neece
- Sun Microsytems
- Adjunct Professor of Electronic Marketing, Santa Clara University
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Short Notes - A collection of interesting Internet Ecommerce quotes
Ticketmaster Online sales up 270%
In a report from Reuters, Ticketmaster Group said it sold 522,926 tickets worth $19.5 million over its Internet site in its first quarter of this year --a 270 percent increase over sales in the first quarter of 1997!
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The Ziff-Davis/Roper Starch Quarterly Update Fourth Quarter 1997
Check out this new survey on Internet use at: http://www.ziffdavis.com/marketresearch/internettrak97q4/itrak_97q4_3a.htm#hours
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Businesses are expected to spend $3.5 billion on Internet direct marketing by 2002.
According to Forrester Research, more than 3 billion pieces of commercial e-mail messages were sent in 1997. The Direct Marketing Association predicts that businesses will likely spend $3.5 billion on Internet direct marketing by 2002. www.forrester.com
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Internet Consumer Sales expected to reach $2 Billion in 1998 and $6 Billion by 2000.
According to Computer Resellers News $1 Billion in consumer retail sales were transacted during 1997. That number is expected to double in 1998. By the year 2000 46 million consumers are expected to be spending $6 Billion online!
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The Internet will become an everyday shopping stop for consumers and businesses
According to a recent survey by Deloitte & Touche the era of electronic commerce has finally dawned. They predict a 400% growth within the next two years.They say that the strongest area of growth will be in consumer transactions, meaning that the Internet will become an everyday shopping stop for consumers and businesses.
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Consumer Retail Spending to Reach $26 Billion by 2002
According to the "1998 eCommerce Report" , by eMarketer, showed that consumers will spend $26 billion (U.S.) in Web purchases by 2002.
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