July 2002   

Contrary to reports, the Internet is not dead. Nor is it a white elephant. It is, rather, a slimmed-down, fitter, more sensible version of its former self. An industry that was riddled with overspeculation, overinvestment, and unsustainable growth has been forced to bite the bullet. Now, with the extraneous matter removed, the "new look" e-commerce environment presents some real, down-to-earth opportunities for switched-on businesses. Here are six ways you can benefit right now from the recession-affected e-commerce environment.

Target Price

There is no doubt that consumers are still spending big money online. In fact, online spending in the United States grew by 36 percent through March 2002. When a recession starts to bite, though, people become more price-focused. According to Nick Jones, senior analyst with Jupiter MMXI, the Internet is the ideal place for people to find bargains. "The Internet user has always been a bargain hunter," says Jones, "For new users it's security first and then price, but for subsequent purchases, it's always price." The Internet, then, has the potential to actually benefit from an economic downturn in the sense that more and more people will be driven to it in search of a bargain. The smart e-tailer will build sales by offering price breaks and/or extra benefits to the online customer.

Inform Your Customer

When times get hard, consumers want to find out as much as they possibly can about what they're spending their money on. In other words, they want to thoroughly research their market to make sure they're not getting ripped off. The Internet, of course, provides the ideal platform to facilitate this. Provide a generous amount of product information -- in fact, give your customers more than they actually need -- and you will make it much easier for them to choose -- and they'll more than likely choose you.

Satisfy the Shopper

The economic downturn is an ideal time to focus on customer satisfaction. That could mean providing more service options on a company's Web front. An example of this is the Eastman Chemical Company, which has just beefed up its Web site by adding tools that allow the customer to pinpoint exactly what type and how much of a certain chemical to purchase for a specific project. According to Eastman Vice President, Fred Buehler, the immediate goal of the project wasn't cost savings but rather building customer loyalty. "Inevitably cost savings will come through fewer customer service calls, but we implemented these features because they are what we would want if we were customers," he says. Eastman is also reaching out to new customers through developing local language content sites. They are currently building a Spanish version of their site, with plans for other European-language sites in the pipeline. Eastman knows that recessions don't last and that it is those companies who build depth to their online operation that will be able to reap rewards when the inevitable upswing begins.

Streamline Your Online and B&M Operations

Research by Jupiter MMXI reveals an interesting effect of the consumer rush to get online. People are now not only taking it for granted that their favorite brick-and-mortar retailer will have an online presence, they are also expecting to get either cheaper products online or a nice little bonus for being online customers. Businesses can and should benefit from such insight by offering shoppers "online only" deals in their traditional media advertising.

Jupiter also found that how a company positions itself online will have a noticeable impact on its traditional business. A recent survey by the e-commerce strategy provider saw that 70 percent of customers will curtail their spending at a company's brick-and-mortar store if they have an unpleasant online shopping experience with that company. The message, then, is clear. Not only should 21st century retailers have an online presence, they should go out of their way to make their cyber customers' visits as pleasant as possible. Fundamental to this is to ensure that the back end of the operation -- order processing and delivery -- is simple, quick, and efficient. In addition, a generous warranty policy must be offered and its terms should be clearly displayed on the Web site.

Go Internal

"The bulk of the money companies can make in e-business is going to come from using the Web to be more efficient," believes Chip Glidman of the Giga Information Group. Perhaps the most effective way that a business can utilize Internet technology, then, lies in streamlining the flow of communication within that organization. Companies can and should be using intranet applications as the backbone of their communication. This will inevitably speed up supply chains, reduce downtime, and save the company money.

Streamline Your Staff

The IT boom saw the asking price for people with specialized Web skills go through the roof. One distinct advantage of the e-commerce meltdown has been that salary rates for skilled e-workers have steadily come back down to earth. Forced redundancies have turned a situation where IT professionals were interviewing employers and forcing them to bid for their talents to one where out-of-work cyber specialists have to queue outside of the CEO's office just like everyone else. This, then, provides an ideal climate for businesses to add IT professionals to their labor force at an affordable price. As Judith Plant of digital business consultancy Adcore puts it, "I'm no longer having to pay telephone number salaries."

The above having been said, a valuable lesson that we can derive from the e-tail crash is to be sensibly conservative with regard to employee numbers and job specifications. The dot-com graveyard is littered with operations that employed far more bodies than were really needed to do the job effectively. Small to medium-sized businesses need to pare down their IT staff to a core number who are trained in more than one specialized area of the operation. Cross-training will result in a smaller, more streamlined, and more economical team.

Opportunity is Still Knocking

"Business-to-consumer Internet commerce is alive and well," is the prognosis of Internet research company IDC. In its e-world 2002 report, it predicts that $5 trillion will be invested in worldwide e-business efforts between now and 2005. IDC believes that the shakedown that has seen so many dot-coms go the way of the dinosaur will, in hindsight, be seen as nothing more than a necessary correction to an infant industry -- one that is now ready to mature.