The Level Playing Field Is an Empty Lot

I don’t want to rake a dead horse over the coals (or, in the case of Pets.com, a bag of unsold horsefeed), but…

There are a lot of companies whose business models, products, or target markets are such that having a web site adds little or no value to their success. These companies would be better off spending money on strategic talent rather than on personalization software; reducing their mid-six-figure budgets for web development to far better, scaled-down $6,000 budgets — with the rest reserved for traditional tactical promotion; and refocusing on field sales training programs rather than on deploying a commerce system.

The web is a maturing business venue now. No new web-centric technology has been unveiled for some time — perhaps even for years. (The last one I can think of that really struck me as important is extensible markup language [XML], and that has as much to do with the back end as it does with the front end.) And if you compare Ernst & Young’s latest online retail report (almost a year old now) to its first online report (in 1997), you’ll see that virtually nothing has changed. Take a look:

  1. In the 1997 report, the top products purchased over the web were (in order from most to least): computer-related products, books, travel, clothing, and music.

  2. In the 2000 report, the top products purchased over the Internet were (in order from most to least): books, computer-related products, music, travel, and clothing.

Anyone detecting a pattern here?

You can’t sell what people won’t buy!

Not long ago, I got an email from a ClickZ reader asking me to look at his automobile wheels web site and discern why he wasn’t selling anything. I looked at it and thought I could see what the problems were, but when I told him that he would actually have to pay me to research and report my findings, I never heard from him again.

But I’ll tell you (and him, if he reads this article) what I found:

  1. He had no prominent shipping information or return policy — a basic tactical error many people make.

  2. He was selling a product over the web that couldn’t sell over the web — in this case, a product that needed to be installed.

My advice to him would have been to establish a nationwide network (perhaps for every metropolitan statistical area in the United States) of companies where he could ship the wheels, then have the purchaser bring the car to that location for installation, or drop the idea entirely. The first option is expensive and impractical, especially since real-world wheel and tire companies (like Discount Tires) already have that kind of network in place. The second option costs nothing and is no doubt the better approach.

There are lots of products that won’t sell online. Here are a few examples:

  1. Products that are expensive and for which emotion plays a large role in the purchasing decision. You’re not going to sell a lot of automobiles over the web (as the former head of Priceline’s auto division made clear a few weeks ago).

  2. Products that need to be integrated into an existing environment. (You’re not going to sell a lot of wall coverings, flooring, or furniture over the web. (Just ask Furniture.com.)
  3. Products that need to be installed (like the automobile wheels above).
  4. Products whose purchase online actually adds to the inconvenience and cost of the product. (Would you pay $12 extra to have a 40-lb. bag of dog food delivered to your door? If so, Pets.com would have liked you to visit its site.)
  5. Products whose quality varies from moment to moment — such as a bushel of oranges. (Yup, I’m predicting the demise of the Webvans of the world — there’s a reason why Webvan is recording a loss of $280 million from January to September 2000.)

But don’t throw the Internet out with the web site.

Now, this doesn’t mean that you shouldn’t have some presence online. And it doesn’t mean that you shouldn’t devote resources to communicating with your marketplace through your web site (and remember — as I wrote last month — online, everyone is part of one marketplace or another). And it certainly doesn’t mean that you shouldn’t be using the Internet’s ability to flow data inexpensively with partners and suppliers to cut your cost of business. It means you shouldn’t be trying to bend the web to get it to do something it just won’t do.

You know, those early enthusiasts were right: The World Wide Web really does level the playing field. And it’s leveling one company after another right to the ground.

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