Implementing Effective E-commerce Strategies

For Manufactures Only

Implementing Effective E-commerce Strategies

By Richard Rowe

May 2001

So, you want to do business online, but haven’t a clue how to start. You are in good company. In the constantly evolving world of e-business, the magazine shelves are full of "How to" e-commerce magazines that detail the success stories, the perils, and the pitfalls of stepping into the virtual world. If it was easy, there would be no such glut of magazines, everyone would be making money, and no e-businesses would ever go under.

Despite any uncertainty, every company in the ground support and service world should explore online avenues and find out what’s right for them. In our industry, it is currently the service companies and airlines that, perhaps unsurprisingly, are setting the pace with sophisticated websites and electronic storefronts. Airlines such as United, Northwest, British Airways, and Southwest are all busy expanding their already impressive Internet services in one way or another, while ground handlers such as Swissport and GlobeGround offer a variety of value added services online.

With some notable exceptions (see the recently published GSE Today Website Directory), many small- to medium-sized GSE manufacturers have yet to make a huge impact online.

While the big names hogging the headlines for now include online travel agencies such as Expedia and Travelocity, as well as the U.S. airline-backed travel website, Orbitz, much can be learned from one of the e-commerce pioneers, eBay. Located (where else?) in San Jose, California, eBay is perhaps best described as an online trading community. The company was launched in September 1995 with a primary focus on personal, online trading. Sellers could list a variety of items for potential buyers to look at, bid for, and finally buy online. The premise is that the ability to buy or sell a particular good is often determined by the geographical distance between the buyer and seller. The Internet, of course, brings the here and now into stark reality, and geography suddenly becomes obsolete.

Within four years, eBay was ticking along on US$8 million a day in gross merchandise sales and receiving several million online visits a day. In the first quarter of 2000, eBay generated net revenues of $85.8 million. So why, and with so little external promotion, has eBay been such a phenomenon? Why is it so attractive and what can our industry learn from it?

Essentially, eBay offers an armchair version of haggling for goods in a North African souk, or outbidding the clown next to you for a Queen Anne chair in a London auction house. But above all it’s a good concept, well delivered. Although slightly more sophisticated, the premise behind such a virtual auction is no different to what supports a good company website. Both have to create an atmosphere of trust and confidence in the intended audience, particularly as many people today are still relatively unfamiliar with the Internet, and have legitimate concerns about confidentiality and what really happens to their credit card details in cyberspace.

Undoubtedly, e-commerce involves a new way of doing business and the success of ventures like eBay demonstrate how consumers have steadily become more comfortable with shopping online. Who is to say whether e-commerce will ever actually replace traditional retail outlets, or simply complement them, but more businesses are now adding online capabilities to their overall business portfolios.

Smaller business--of which there are many in the world of GSE--must look carefully at how to approach e-commerce, but should not feel that it is beyond their reach. Research companies project that e-commerce revenues will jump as high as US$100 billion by 2003, and there is no reason why the ground support world can’t get its share. The trick, however, is to ensure that e-commerce becomes a key growth factor in a company rather than a millstone round the neck of the unprepared.