ETD: 798 How Small Businesses Can Afford E-Commerce; More
Online Retailers Accepting Checks; Marks & Spencer
E-Tailer's Digest
etd_post at gapent.com
Tue Jul 6 11:52:31 GMT 2004
E-Tailer's Digest --- Everything for the Retailer
Issue #0798 July 6, 2004
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] How Small Businesses Can Afford E-Commerce
[3] More Online Retailers Accepting Checks
[4] Marks & Spencer
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[1] Greetings.
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Hi All:
I hope our US friends enjoyed our Independence Day weekend. It seems to be
a BBQ holiday, and not much shopping. Stores in NJ were empty.
For our e-commerce members, the burning questions is can you afford
e-commerce? What about accepting checks online?
There was an interesting article this weekend about Marks & Spencer - the
British icon of retailing. It's running into hard times. Is it a case of
not keeping up with the times, or the fickleness of customers? What do you
think?
Tell us about your business which will remain for posterity at
our "Members: Who Are You?"
site. http://etailersdigest.com/resources/members/index.htm And we have a
form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] How Small Businesses Can Afford E-Commerce
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With many online behemoths still struggling to turn a profit in the
e-commerce sector, smaller businesses may question whether the online
sales model is truly a road to riches or just a pipedream.
After all, it costs big bucks to design, develop and maintain an e-commerce
site that can draw the kind of customer volume needed to generate
significant revenues and profits. That is why many small and medium
businesses (SMBs) are choosing to abandon their homegrown, cobbled-together
e-commerce systems, which often are vintage 1996 or 1997. Instead, they are
buying prepackaged software to manage their e-tailing strategies from end
to end, forgoing the high expense and risk associated with building
solutions from scratch.
"You can't afford not to sell online," Wintergreen Research president Susan
Eustis told the E-Commerce Times. "If companies don't do it, their
competitors will throw them out of the market. And that goes for businesses
of any size."
One case in point of the buy-prepackaged trend is Anaconda Sports, which
sells sports equipment to youth leagues, adult amateur athletes and
schools. Since 1978, the company has sold its products via catalogs and
call centers, and in 1996 it launched its first Web site.
The company recently outgrew its patched-together in-house solution and
migrated to IBM's WebSphere Commerce.
"When we were getting quotes from other companies, they were estimating
exorbitant consulting fees every time," Rob Meyer, director of Internet
services at Anaconda Sports, told the E-Commerce Times. "We thought the
price of IBM was going to be way out of our league. But in the long run, it
became the most cost-effective choice."
Planning for Growth
Anaconda's catalog contains about 6,000 individual products. Similar
companies with this sort of large product selection must be sure their
vendor can handle this kind of diversity, Meyer warned.
"Other companies would have had to custom code the back end, which ran the
cost up," he said.
He added that the real benefits of his company's new e-commerce system are
efficiency, convenience and cost savings, not added revenue. Unlike the old
ordering system, WebSphere Commerce sends online orders directly to the
warehouse, eliminating the need for customer service representatives to
touch every order.
What is more, call center representatives and salespeople can focus their
efforts on large orders, while smaller purchases can be made online.
Is Anaconda a rare example or one of many SMB success stories?
Steve Gatto, market manager for WebSphere Commerce, said there are many
similar outcomes among small and mid-size businesses. However, he told the
E-Commerce Times, online sales success requires intensive up-front planning
and the right vendor.
"The majority of the customers in the market right now are in their
third-generation rollout of Web initiatives," Gatto said. "And for the
small business customers, it's particularly important that they buy
specific tools to help them start a campaign, run a promotion, publish a
coupon, et cetera, without any IT involvement."
Looking for a Bargain
When evaluating vendors, small businesses should make sure the e-commerce
products that they are considering interact easily with end users, Gatto
said. The software also should help leverage best processes and be easily
extended and integrated with other software solutions over time. Finally,
it should be easy to deploy initially and manage over time.
For her part, Eustis recommends that SMB customers evaluate the total cost
of ownership , not just the initial software price. "And don't let the
sales force do the price comparison for you," she added. "You want to do it
on your own or have an independent consultant do it."
A trial installation is also a useful tool for evaluating e-commerce
software. Choose a department within the company, buy the product and put
it on a low-cost server in that department, Eustis suggested.
"Take a year, do the install right, and make sure it works," she said.
"They you will see the advantages, and it will be much more possible to
allocate a budget and determine the price points. You have to think in
terms of value and not just in terms of cost.
"The good news is that IBM's products are priced to permit that," she
added. "Some other companies are afraid of eroding their existing business,
and their price points are a bit more scary to small businesses."
Details...
http://www.ecommercetimes.com/story/32071.html
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[3] More Online Retailers Accepting Checks
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Online retailers are trying to bring in new customers by allowing them to
pay for goods with some old-fashioned methods - checks and invoicing.
Credit cards are the most popular form of payment online. But for retailers
trying to tap into every demographic - including older shoppers who fear
online fraud, customers who may not have enough credit for big-ticket
items, or those who lack credit cards altogether - alternatives to plastic
can open doors.
"We've seen an increased interest in (alternative payments) over the past
year or two. I think it's going to continue to grow," said Bob Nadeau,
group manager of online product development for Paymentech LP, which
processes more than half of all Internet transactions and works with
hundreds of thousands of retailers.
Following in the footsteps of 1-800-Flowers.com Inc. and gifts site
Ross-Simons, diamond retailer Odimo Inc. began offering "Bill Me Later"
invoicing to customers on its Web sites diamond.com and ashford.com in
June, promising no payment for 90 days on purchases of more than $250.
Under Bill Me Later, a service developed by I4 Commerce Inc., a shopper
makes a purchase with instant credit rather than a credit card, receives an
invoice in the mail later on and pays the bill over time.
One in five adults does not own a credit card, and one in ten does not have
a bank account, according to Gwenn Bezard, senior analyst at market
research firm Celent Communications.
"That might sound like a very marginal market, but as a retailer, if you
are able to tap into that - even if that represents a few percentage points
in sales increase - that's worthwhile," Bezard said.
Celent predicts that e-check transactions, including those funding PayPal
accounts, will total $17.9 billion by 2005, or 9 percent of e-commerce
transactions. That would be up from $7.3 billion, or 6 percent of
e-commerce, in 2003.
Invoicing services such as Bill Me Later will be responsible for $294
million in transactions by 2005, up from $69 million in 2003, the firm
forecasts.
Wal-Mart Stores Inc., the world's largest retailer, began accepting
e-checks on its Web site last summer.
Because I4 Commerce pays merchants within 24 hours of a transaction, just
as a credit card company does, retailers have little to lose by offering
Bill Me Later.
"We own all the risk and responsibilities associated with the loan," said
I4 Commerce chief executive Gary Marino. I4 Commerce approves and denies
loans based on information from credit bureaus and from merchants, which
can tag preferred customers.
Bill Me Later users default on about 4 percent of balances, low in
comparison to credit cards. The Federal Deposit Insurance Corporation
estimated the average credit card default rate at 5.76 percent last year.
Details...
http://www.bizreport.com/article.php?art_id=7574
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[4] Marks & Spencer
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For more than half a century, the Marks & Spencer department store chain
captivated British consumers with a winning combination: good value,
attractive merchandise and gentle social policies.
The storied name inspired unrivaled allegiance among the famously
brand-loyal British. It was the first stop for shoppers looking for a suit,
a special meal or ladies' lingerie.
But more than a century after its founders built an empire from a lowly
market stall, the Marks & Spencer label is a threadbare version of its
postwar glory. The worn- out icon, which owns the New Jersey chain of Kings
Super Markets, is fighting to save its independence, its honor and its
place in British society. The company has 350 stores in the United Kingdom
and 122 franchises in Europe, the Middle East and Asia.
On July 12, Chief Executive Stuart Rose, who was hired in May to restore
the company's position, is expected to unveil a turnaround plan meant to
deter corporate raiders. Waiting in the wings is billionaire Philip Green,
a high school dropout and retail upstart whose brands, including the
fashion chains Top Shop and Dorothy Perkins, epitomize the cheap-chic trend
that brought Marks & Spencer to its knees.
Started in the late 1800s by Michael Marks, a Russian Jew fleeing pogroms,
and Tom Spencer, a wholesale warehouse cashier, the company evolved into
Britain's best-known and most respected brand for clothing, food and
housewares, according to the company. By the 1960s, more Britons bought
clothing and food from Marks & Spencer than from anywhere else. Its women's
lingerie lines captured 35 percent of the market.
In the 1970s and'80s, a wave of aggressive expansion overseas left it
complacent at home. In 1988, it tried in vain to gain a foothold in the
U.S. clothing and grocery market through the purchase of Brooks Brothers
and Kings.
Brooks Brothers cost too much, and Kings, which has 27 stores in New Jersey
and New York, was too small to give its parent a foothold in the American
grocery industry.
Meanwhile, in the United Kingdom, smart domestic competitors wooed
customers away from the flagship stores with lower prices and edgier fashions.
Hopefully new management will turn the company around, before it goes be
the wayside.
Details...
http://www.nj.com/search/index.ssf?/base/business-6/1088927620196080.xml?starledger?b
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Links to follow
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