Let That Pendulum Hit You...
in the Derriere
what? About 90% of all new businesses fail. Period.
Product, service, bricks-and-mortar, mail order, B2C, B2B,
A2Z - you name it. It happens for any number of reasons:
bad planning, poor location, shabby customer service,
short-sighted management decisions, insufficient cash
flow, weak marketing, and more. But no matter how you
slice it, lasting commercial success comes to very few. So
why should we expect e-commerce to be any
different? We've got to ask an even louder “why”
when we look at the fact e-commerce has only been around
for a couple of years. Heck, we’re still just
figuring it out.
capitalists who couldn’t wait to pour in cash
just a few months ago suddenly have been afflicted with a
deafness of Biblical proportions when they hear “dot
com.” The NASDAQ has beaten the dot coms to a
pulp. And, sadly, some pretty innovative and strong
players are biting the dust. Word on the street, word in
print, word online, word on the air: Internet B2C is
dead. Just one problem: nobody told the consumers,
who keep buying more and keep buying more often.
some of us forgot to buckle the belts on our Reality
Seats, but what's going on out there is not the Decline of
Western Civilization a la Web. All we are witnessing is
that old, familiar pendulum swinging back from its latest
peak. So it turns out the Internet isn’t a
get-rich-quick machine that defies all logic and all
history. Big surprise. The thing to remember about a
pendulum is that it keeps swinging.
there are folks out there who view all this for what it
really is: a bump in the road of continuing e-commerce
progress. And what they are saying should be music to
co-founder Geoffrey Ramsey predicts that despite a
slowdown in growth, 2001 will see e-commerce sales
increase 57% over year 2000 figures. "The fact is
that the Internet is not going away, and we're going to
continue to see a migration of dollars," says Ramsey.
"E-commerce is chugging along … It's a snowball
that's grown and grown, and people [who] have bought
online before will continue to buy online, and they're
going to buy more," although, "businesses are
really having to tighten their belts and [get] smarter
about running their business."
separate forecast by Gartner Group, Inc., predicts the
North American Internet retailing market will grow from
$16.7 billion in 1999 to $142.4 billion in revenues by
2004, a compound annual growth rate of 53%!
non-scary numbers, huh? But to get there, we're going to
have to make some changes. Stephen Dull of Andersen
Consulting reminds everyone that Internet-based
commerce as it is currently being practiced is not
close to meeting consumer's needs. "Half the
people we surveyed are neutral to very disappointed with
current Web offerings. That's an enormous well of
dissatisfaction. No business can survive with that
strength of dissatisfaction."
probably sound like a broken - uh - CD, but instead of
focusing precious dollars on marketing, advertising,
promotions and price discounts, e-tailers need to pay
attention to creating value for their customers and
earning loyalty. They need to rethink their privacy
policies and the value of personalization, support more
than the “idea” of Customer Service and get real about
the consumer's desire for speed rather than media richness
(to name just a few).
words; the pendulum will come back. Already, wide
scatterings of seeds are being sown for a "Back to
Basics" movement in e-commerce as, right and left,
folks are recommending stuff like "knowing one's
customers", "delivering a Web experience that
customers really want" and "earning money"
(you will recall this is e-commerce). Of
course, folks are also recommending it's a good idea to
have enough capital to ride out the bumpy spots along the
I think Dana Blankenhorn, in his inimitable style, has
said it best:
many reporters, especially those with friends who lost
their careers reaching for dot-com riches, [this
downturn] proves the lesson of Dorothy in "The
Wizard of Oz." You should stay home, you
shouldn't take risks, and there's no place like home.
But the real lesson of the film is different: Everyone
grows up, and without adventure the world's just gray.
if you loved a start-up and lost, however, you've had
an adventure and are ready for another one. Another
ship will beckon and another and another. Some will
founder, but some are bound for glory. The only way
you'll know which is which is to get on board."
you going to hibernate, or are you going to meet the
challenge? Check the weather, dress right, and get going.
And oh, yeah … don't let that pendulum hit you in the
backside on your way out the door!
"E-Commerce to Grow 57 Percent in 2001." Jon
Weisman, January 8, 2001. E-Commerce Times.
2 "Retailing Web Sites Face Tough Future."
Candace Talmadge, December 24, 2000. Internet Report.
3 "Retailing Web Sites Face Tough Future."
4 "Start-Up Love Will Go On and On." Dana
Blankenhorn, January 11, 2001. ClickZ. <http://www.clickz.com/cgi-bin/gt/print.html?article=3152>