Contrary to popular belief, however, consumer e-commerce isn't dead. Retail e-commerce sales grew to $7.5 billion, up 24.7 percent in the second quarter of 2001 compared with just under $6 billion in the second quarter of 2000, according to an August report from the U.S. Commerce Department. And even after Sept. 11, Forrester Research predicts that online sales during the important holiday shopping season will still increase to $11 billion this year--up 10 percent from last year's $10 billion level. That's much slower growth than previous years, but it's growth nonetheless.
Although many pure-play e-commerce companies have been abysmal failures, brick-and-mortar enterprises continue to establish retail sites. They may have been slow to jump into e-commerce (which looks incredibly prudent in hindsight), but they've embraced it for the long haul. They've taken a slower and more considered approach, trying to learn the lessons from the failures and successes of extinct and surviving e-commerce pioneers.
There are still a lot of mistaken ideas about consumer e-commerce floating around and it's important to avoid these pitfalls from the past. Here are four B2C myths that can lead you astray when it comes to managing your e-commerce operations:
1. Stickiness is good. Many sites aspire to keep customers on the site for as long as possible--a quality often referred to as "stickiness." Sites often add features and design navigation to increase stickiness. The longer customers stay on the site, clicking from page to page, the more they must like the site. Right? Wrong. When it comes to e-commerce sites, stickiness is more like stepping on a wad of chewing gum than luxuriating at a resort. Customers don't like wasting a lot of time on a site when they are looking for a particular product. Think of it this way: When you go to a service station to buy gas or visit the local pharmacy to fill a prescription, do you like to hang out any longer than necessary?
2. More is better. Some sites try to wow customers with flashy technology by bombarding them with fancy graphics, animations, and sound effects. Others try to impress shoppers with largesse of information and options. Fancy visual and sound effects slow sites to a crawl. Screens overloaded with information and options are confusing. A recent survey from Jupiter Media Metrix found that visitors were twice as likely to return to a site with faster-loading pages than they are to sites that provide rich media. More is better when it comes to product information, not flashy technology. The Jupiter survey also found that 59 percent of those surveyed would be more likely to return to a site that offered more product information.
3. Personalization drives profitability. In recent years, much has been made of personalization technologies to drive profitability. It turns out that personalization is just one of a number of merchandising techniques that e-commerce sites should consider for incremental sales improvement. It's not the silver bullet dot-coms thought it would be. "Personalization was supposed to be the killer app of B2C," says Gene Alvarez, senior program director of electronic business strategies with the Meta Group. "Former dot-coms have found out that personalization doesn't help complete sales." The problem is that customer actions don't always reflect their interests. You may have bought a book on baseball as a gift for your brother-in-law the sports nut. As it turns out, you hate sports, but that doesn't stop the site from continually calling your attention to books on baseball, football, basketball, and the like. Alvarez recommends that instead of investing in expensive personalization technology sites would be better off devoting their energies to proper merchandising by answering questions and having items logically arranged.
4. You can sell anything on the Web. Selling CDs and books online is one thing. Selling automobiles, liquor, and major appliances is another. Certain products aren't a good fit for e-commerce sales. Sometimes it's due to legal restrictions such as those that affect the sale and distribution of alcohol or those that involve vehicle registration. Sometimes shoppers need to kick the tires or try on an expensive piece of apparel to make sure it fits. And sometimes the discounted price shoppers find on the Web may not offset the hefty shipping charges for large, heavy items, such as an oven or a jacuzzi. Although you may not be able to complete the transaction on the Web, that doesn't mean the Web can't assist the sale. You can still use your site to inform customers about these items and direct them to the appropriate sales channel.
Probably the worst idea e-commerce dot-coms fostered was the shoot-first-ask-questions-later philosophy of managing Web operations. Avoid drinking that Kool-Aid and give yourself the necessary time to think through the business case for e-commerce initiatives. That way you won't fall prey to other B2C myths.
What other bad ideas are still rumbling around about conducting e-commerce? E-mail Adrian or Talk Back below.
