[October 17th, 1998]

See Also   Why You Need an Add URL Page   A Tale Of Two Sites   Don't Duplicate...Differentiate!   The Continuing Battle Against Online Fraud   Taking Care of the Pennies   How To Recession-Proof Your Business   Your Fulfillment Choices   The Silent Thief - How to Get Rid of TopText   A Checklist for Accepting Credit Cards Online   Five Questions That Will Help YOU Succeed Online   Back To "E" Basics   Beyond SET: Enhanced Security for Online Transactions   Just How Serious is Online Fraud?   Your Direct Channel to Customer Service   Online Customer Service: Best (and Worst) Practices   How to Survive the Dot.Com Shakeout   Step-by-Step to Your Own Profitable Web Business   Where Do Average People Find Business Success?   What's REALLY Required To Start An Online Home Business?   CRM in SmallBiz: Disappointing Misconceptions

Hardly a week goes by without a new electronic commerce survey being published. Although the figures within these surveys vary – often dramatically – they all have one thing in common. Each survey confidently predicts a huge growth in business-to-consumer e-commerce.

Not surprisingly, these numbers have many entrepreneurs licking their lips and rushing to set up a Web store so that they can get their share of what they perceive to be a lucrative market.

However, would-be Web merchants would be well advised to take the time to analyse these figures carefully before basing a business plan on them. For each of these surveys has a potential trap for the unwary. It is all too easy to make the assumption that these large, projected e-commerce sales will take place over the Web. This is not necessarily true. In general the forecast numbers cover the value of goods or services that will be sold electronically, irrespective of the technology that will be used to fulfil them.

One thing is clear, though. The current online community is not large enough to support this projected sales growth and so a whole new group of shoppers needs to be brought on line. And whilst low cost PC's, such as Compaq's latest $699 offering, and innovative solution's such as Apple's iMac will encourage many new consumers to get connected to the 'Net, a large number will need to be enticed on line by a completely different technological solution.

This was clearly one of the major reasons behind Microsoft's acquisition of WebTV, a product that incorporates a Web browser and e-mail client into a television. An implicit assumption behind Microsoft's strategy is that what is needed to bring about a boom in e-commerce is simply easier access to the Web. It will be some time before it is clear whether or not WebTV will be a success, but so far the uptake has been middling with only 450,000 subscribers to date in the United States.

In the meantime, there are a growing number of electronic shopping systems that don't rely on the Web at all. For example, here in the UK BSkyB has just launched the world's largest digital satellite service. As part of the sign up package, BSkyB are offering a healthy $280 installation discount to consumers who agree to connect their satellite decoder boxes to the telephone network for at least 12 months. This will then allow consumers to purchase goods and services electronically from their couches, using nothing more than their remote controls.

One trend though that I think WebTV has identified correctly is the convergence between the Internet, personal computers and domestic appliances.

In Japan for example, V Sync Technology is planning to launch an "Internet refrigerator" next year. This high-tech icebox will sport a 333 MHz Pentium II PC with 128 Mbytes of memory and 3.2 Gbytes of disk space. An LCD display and touch panel will show up like a through-the-door water dispenser, and you can also use a voice recognition package for spoken command and control. The PC will, of course, have a connection to the Internet.

Closer to home, NCR's Knowledge Lab recently announced a Microwave Bank that allows consumers to use the humble kitchen microwave for online banking, shopping and Internet access.

"At NCR we believe in adapting technology to the consumer rather than the other way round, and the Microwave Bank is a prime example." says Stephen Emmott, director of the Knowledge Lab. "If you're one of the 70% of the population who have never used a PC and keyboard in your life, or if you'd rather watch 'Frasier' than bank, the Microwave's ideal. It combines a host of Internet services in one unit -- so you can shop and bank from your kitchen, as well as e-mail your kids or watch TV."

Although currently only a concept, the Microwave Bank is already attracting interest from serious financial players, such as Barclay's Bank.

So what is the lesson from all this? Whilst today's model for selling electronically to consumers is largely via the Web, this does not mean that tomorrow's model will necessarily be the same. And savvy e-tailers would be well advised to keep a close eye on emerging technologies and the opportunities they will bring, whilst enjoying the current healthy growth in Web-based commerce.

Do you agree with me? I'd love to hear your comments.