The E-Commerce Jungle

The other day I stopped by a friend’s office for a chat. As soon as I opened his door, I was a little taken aback because he didn’t stand up to greet me. In fact, he didn’t even acknowledge my presence – his nose was glued to his screen, and a big grin was spreading across his face.

A minute or so later he realized I was in the room and beckoned to me. “Get over here,” he whispered, “You’ve gotta see this.”

“This” was a strange looking application bar hovering over his browser which was currently displaying the new Diamond Rio 500 MP3 player on Amazon.com.

“Yeah?” I asked, “so what’s the big deal?”

He didn’t say anything. He merely smiled and pointed to the application bar.

I moved in for a closer look. The bar was emblazoned with a big shopping cart logo and the name R-U-Sure. The name of the product he was looking at appeared on the bar. A price was there, too but I noticed something very strange about it… it kept getting lower!

Yes… lower. As I watched, the R-U-Sure program bar was actually taking the price that my friend had found on Amazon.com and was searching a whole passel of other sites on the Net for a lower price. Within seconds it found it, complete with a quick link to go and buy.

Right then, I knew that e-commerce would never be the same.

R-U-Sure is one of the latest examples of what San Jose Mercury News writer Dan Gillmore calls “subversive software,” products that “undermine the status quo and empower the individual.”

These products, often running not as browser plug-ins, but as system extensions or background programs, allow users to harness the power of the Internet in a way that goes beyond what web publishers want you to see and do. In effect, they use the interconnectedness of the Internet to pull all the resources available into one easy-to-use package.

For e-marketers and online retailers, the implications are staggering but obvious. While many e-tailers want to behave as if they’re running bricks-‘n-mortar stores in the analog world where variables such as distance from the competition and location matter, new tools like R-U-Sure are going to make us fundamentally re-evaluate what it is that the Internet does and how we’re going to be using it in the future.

First of all, having the ability to comparison shop while on any site immediately commoditizes most products. Competition instantly becomes price-driven, and many of the factors that matter in the analog world – store location, accessibility, local competition – cease to matter.

Auxiliary information ceases to matter in some respects, too. Sure, Amazon might offer product reviews and product recommendations, but you can just use it to speed your purchase and then buy the product wherever you find a cheaper price.

Next, brand starts to become the ONLY thing that matters. I know plenty of people who don’t care that Amazon isn’t the cheapest – they like it and that’s where they’re going to buy.

Getting people onto your site because they recognize the brand will still be a primary driver of sales… especially since many people are still very concerned about online shopping security (@d:tech and TalkCity survey, November 12, 1999) and are likely to buy only from brands they recognize.

Finally, be sure that R-U-Sure is only the tip of the iceberg. Other “subversive software” tools such as Third Voice, that allow users to post comments on web sites, put even more power into the hands of consumers. Not only can they now find out instantly if your price is the lowest, but they can read comments from satisfied and unsatisfied customers, too – comments that are out of your control.

How is the market going to react to these tools? Surely there will be some initial reactions to stop these tools – the makers of Third Voice already have a legal defense fund set up – but as with any attempts at Net censorship or centralized control, these are ultimately doomed to fail. Someone once said, “The Net interprets censorship and routes around it.” A true statement, indeed.

Ultimately, we need to look at new strategies. Perhaps a “warehouse” approach where competition is purely based on price, and web site “design” consists of a straight product listing. Perhaps using these subversive tools to your advantage, surfing Third Voice’d sites and posting rebuttals, pointers, etc.

Above all, we need to think in new ways, realizing that the web is NOT like the analog world and requires new thinking and new ways of doing business.

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