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.

A recent report in the E-Commerce Times detailed how the U.S. government is considering the launch of a federally funded e-commerce pilot program designed to help small- and medium-sized manufacturers take their business online. If passed, the new proposal would create a network of centers across the country that would offer technical know-how, training and guidance for manufacturers. The thinking is that smaller businesses--the backbone of many an economy--have been slow to adapt to e-commerce, and there is a fear that they might be left behind.

Currently, it’s hard to tell how many small businesses regard the Internet as a place for buying or selling goods. Interestingly, of those who responded to the GSE Today website survey, just over 50 percent said they would consider buying used equipment online. The fact is, however, that most small business websites in this industry act merely as brochures. They are stationary pages that list products and provide contact information, but have no capacity to conduct e-commerce transactions.

The two key questions that businesses ask themselves before stepping online are probably, "How do I do it?" and "How much will it cost me?" I can’t pretend to have the answers, but the good news is that in this age of rising Internet sales, the competition between e-commerce solutions providers is intense and the costs are coming down. Many have teamed up with Internet Service Providers (ISPs) and web hosters, so the chance of finding a one-stop solution system provider is good.

What must be remembered is that developing a website is no different to developing any other kind of external image. It’s about developing a positive brand that is clearly recognizable and attractive—it’s just that this time the target is the online consumer. But beware, experts warn that there is much more to developing an online image than simply duplicating any branding carefully built up in print media. Forget flashy images and jazzy text; it’s all about enhancing the kind of one-to-one relationships that make the Internet unique. Consumers must be given the best (or simplest) interactive experience possible. Never forget that web brands are multi-dimensional and need to engage a customer, and make him or her want to return time and time again.

Like any form of promotion, bad advertising is worse than no advertising. Keep it simple, and make the technology you buy into and the end result fit your business targets. Rather than make you look like an all-knowing sophisticate, the array of web applications that can add bells and whistles to your site might just serve to irritate. What’s hot for one site may not be hot for another.

Although building an electronic storefront or developing a website appears daunting, it needn’t be. Our advice is to use the legion of e-commerce products and services that are out there to your advantage. Conversely, if selling on the web is not a key objective for your company, don’t. It’s certainly not for everyone. You could go for a purely promotional brochure site that promotes foot traffic to your door like you have done for years using more traditional means. Or you could opt for just one or two added value items on your website, such as online product quotations and credit applications in addition to the usual digital brochures.

In our own research, we have logged plenty of words from the wise. Don’t try and develop a site that is overly complex. Offer clear, easy navigation. Most people download websites using relatively slow modems so avoid massive content and flashy graphics. Go with a turnkey solution provider. Be aware that products that sell normally may not sell online. Above all, make it a good experience.

Also, be aware of the risks. E-commerce is changing the way we do business, but it also changing the risk of doing that business. Consider a risk assessment of your exposure to issues such as intellectual property rights, security exposures, business interruption, and reputation exposure.

With all of the above in place you will have a website or a store that is always open to anyone in the world with a computer and an Internet connection. And that’s most of us.

The final piece in the jigsaw is traffic. It’s all very well having a well-targeted website that’s all ready to wow customers with its ease of use and sheer excellence in giving customers what they want, when they want it, but you need to generate the traffic in the first place. That’s perhaps where GSE Today can help. As we upgrade our own website--which currently receives 6,000 visitors per month--we will become a one-stop information source for the ground support and service business. We will do this by providing the kind of content and search engines that will entice visitors time and again, but also direct them to your own growing websites, so helping to generate that all-important traffic.