The Secrets to E-Commerce Success

The explosion of Internet commerce in 1998, especially during the holiday shopping season, proved that selling goods over the Internet is a viable business plan. Some e-commerce providers, however, remain better equipped than others to handle the boom, and thereby find profits in their future.

International Data Corp. (IDC) recently conducted a survey of the nation’s top e-commerce merchants to find out what strategies work in e-commerce.

Chief among the successful strategies of the market leaders is having clear objectives for corporate e-commerce sites, IDC found. Reaching new customers and increasing customer loyalty were the primary objectives for e-commerce merchants surveyed for IDC’s report “The Web Sellers Speak: Learning from the Leaders.”

“These leading Web merchants reported that successful online commerce is all about reaching new customers and retaining them,” said Juliana Nelson, senior analyst with IDC’s Internet and eCommerce Strategies Group.

More than 92 percent of the online merchants surveyed are actively building user loyalty programs, which often involve various forms of customer service, to drive repeat customer traffic, the IDC survey found. Three-quarters of the Web merchants surveyed use personalization and mass-customization features to increase customer.

“Personalized content and products are much more meaningful to the visitor and improve the quality of the experience,” Nelson stated.

The IDC study found a crossover effect occurring among business-to- business and consumer online commerce merchants. Companies that sold primarily to businesses are now selling to consumers, and vice versa.

“Merchants must recognize and adapt to this new business-to- business/consumer customer, which is very different from their traditional customer base,” said Nelson. “New and innovative thinking on the part of the Web seller is essential for successfully reaching this new customer.”

Innovative thinking is critical when targeting international customers as well, according IDC’s report. As Internet users increasingly become more global — IDC research shows that 44 percent of users resided outside of the US in 1998 and 58 percent will by 2002 — e-commerce is becoming a highly cost-effective method of selling into new markets that are geographically out of reach. Merchants surveyed in IDC’s study are very involved in internationalization efforts and are addressing many of the concerns surrounding international commerce as well.

“Due to the pervasive nature of the Internet, merchants must be prepared to agilely handle distribution, logistics, and international commerce issues, which often get extremely complicated, very quickly,” Nelson said.

Survey participants also report average costs for building an e-commerce site climbing to nearly $6 million and annual maintenance and promotion costs climbing to $4.3 million and $8.6 million, respectively.

“Merchants told us that the most important lesson they have learned is that they can never rest. The envelope must be continuously pushed for online success,” Nelson said.

Related reading