My reticence may have come from Bernoff's admission that he's been a sideman in the Forrester band for four years, looking at non-starters like "John Malone and his 500 channel universe, Larry Ellison's NCs, and Bill Gates' $425 million purchase of WebTV." Finally, however, he's got some numbers that might make you sit up and take notice. Numbers like 25 million interactive TVs in five years, 122 million digital cellphones, and 10 million Palm Pilots, all with Web capability. (Bernoff calls all these things "ePliances" - Forrester analysts need an easy-to-remember hook for everything and that's a good thing.)
Small, specialized applications will win on ePlainces, he said. This won't expand your market of users, however. "If you're online 20 hours a week, you're twice as likely to be interested in data services on a cell phone" as someone who is not online. (Think about it - it makes sense.)
When the Web was first spun, everyone wanted to sell pizza online, but it will sell best through interactive TV, Bernoff predicted. A recent test of an interactive pizza ad by Domino's went to just 1,000 people, but 140 ordered pizzas, using a new standard for interactive TV coming from the Advanced Television Enhancement Forum. Bernoff figured this will make a $17.4 billion market by 2004, $10.9 billion of it coming from advertising.
Cellphones, meanwhile, will soon get data service from something called the Wireless Access Protocol, running at just 14.4 Kbps. The data services will be required so 911 operators can tell the ambulance where your car crashed, but that doesn't mean Internet commerce can't take advantage of it. "When I get off the plane in Houston, it will tell me where the best restaurant is from Zagats. Or at WalMart it will tell me about specials on aisle 3," Bernoff predicted.
"Remember it's big opportunities for tiny applications. Use the right devices for the right purposes. Interactive TV is about lead generation, handhelds extend relationships and create loyalty. Finally you want to partner with the folks who make the devices, with network operators, and with cable and satellite operators. Focus on opt-in commerce." Your Clue is to expect a lot of big Venture Capital money to head in this direction next year.
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I have begun my adventure at Voxcap.Com, discussing how next year's elections might impact the future of the Internet. I write daily for ClickZ, and appear every Saturday at 6 Eastern on TechEdge Radio in Phoenix, Arizona. I write monthly columns for NetMarketing, Boardwatch, and Intellectual Capital. Once every other month I'm in CLEC Magazine. The lead item here is also the Monday e-commerce column of Andover.News. You can still buy my book . Subscription instructions are at the bottom of each issue.
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For my money, the most impressive speaker at the recent Forrester New Media & Marketing conference in New York was senior analyst Lisa Allen, whose topic was "elastic retailing." (I prefer it to the phrase "clicks and bricks," which has suddenly become a favorite buzzword at "USA Today" and "Business Week" for its promise of reasserting the dominance of traditional big companies over these noisome Web-folk.)
Forrester vice president Mary Modahl may have written the book (the still unpublished "Now or Never," handed out as an uncorrected manuscript during the event) and she has all the numbers and presence you could ask for in a Forrester executive. But I prefer someone like Allen, who is able to describe the future in human terms, and deliver a call to action worth acting on.
From a technology perspective, what she was saying was simple - integrate. Integrate your stores with your Web site, integrate all your databases, and have what you need to treat people like they want to be treated, no matter where you meet them.
From a strategy perspective, Allen was suggesting you think about your market the way a magazine publisher would, as a lifestyle worth serving.
Her poster child for this new form of retailing was none other than REI - an outfit few have confused with Web success until now. REI has stores, it has a catalog, and it has a Web site, but it has just one set of databases. Its membership program (for $15/year you're eligible for discounts and rebates) gives it permission to track and sell against customers' needs. Its product database gives it twice the online SKUs than in its stores, so by Web-enabling its cash registers clerks can up-sell and cross-sell. "If someone is checking out with skis, the clerk can try to up-sell wax, and if the customer couldn't find it on the floor, the clerk can order it for shipment home," said Allen. (Or send it to the ski lodge.)
"The elastic retailer goes after a lifestyle," she said, and when you don't have the expertise in-house, as happened to REI with content, you find a partner, as REI found "Outside" magazine. "The elastic retailer is both broad and deep, on behalf of the lifestyle segment. With elastic retailing, you have a less fragmented, more seamless experience, a better experience for the customer." You can still have a variety of channels, but underneath you have things integrated. "This gives the elastic retailer a richer profile of customers, a single delivery, and you get all questions answered by one phone call. It's a better customer experience."
The best thing is that anyone can do this, and it shouldn't cost a lot. You should have a database of your customers and products, even if you're just a locksmith. You want to define your customer properly, and fit yourself into their lifestyle - that's what specialty retailing is all about. You would expect that big companies can really put the hammer down with elastic retailing, but if you pool your purchases, look for bargains at auction and lower your costs further by using b2b Web sites you don't have to lose. After all, you can get there faster than your big competitor can, right? (Modahl's book confirms this view. One of my favorite charts in it shows an hourglass of big Web successes and small Web successes, which sometimes trade places, but usually squeeze out the mid-sized outfits that move too slowly or don't have the capital to change.)
And don't think that just because Amazon.Com has customers' loyalty now, that its success is a given. "You're also facing customers to whom loyalty is a foreign, if not four-letter word," said Allen. "76% of satisfied shoppers say they'd try a competitor, no problem."
The conference' theme statement, given by group director David Weisberg, was directed at his Fortune 500 audience, facing fearful "dot-com" competition, but it pertains to everyone. "These are early days." Don't let anyone tell you the game is over.
A Niche Too Full (Stop the Portal Madness)
The "portal mania" of 1997 caused a host of companies to offer portal-like services in 1998, so "any site could be a portal." You want to offer free e-mail, free Web pages, an affiliate program, news services, forums and chat? You say you don't have the cash for any of this? No problem - they'll do it for the advertising.
With this week's Internet World show in New York, it's time to call that vein played-out. There are now portal service specialty shops and localization outfits. There are e-mail portals and Russian portals. There are meeting portals and news portals, even community portals. There are portals designed for small businesses just about everywhere, there are portals for ISPs, there are newspaper portal services and local portal services. (Any portal in a storm, right?)
Well, I say enough already. If you have something better it should stand on its own two feet. If you don't go back home until you do have something better.
No Slam Dunks in Merger Mania
Two merger agreements being hailed by investors and analysts as the rise of new monopolies are nothing of the kind.
First, the deal between MCI Worldcom and Sprint is about the past, not the future. Voice market share and even backbone capacity aren't what win. Finding a way to make that bandwidth useful, both to consumers and business partners, is far more important. That's something neither Bellheads nor cable head-ends have figured out. Great customer service also means more than high market share. Mindspring and Earthlink are cleaning AT&T's clock, and my guess is CLECs and ISPs will clean the new MCI Sprint's clock. The only way this works is if MCI can find lots of high-quality, consumer-focused resellers for this bandwidth (like AOL) - but that's not going to give the best return to shareholders. This is a monopoly play in an era that rejects monopoly, so if you work for either of these outfits, the Clue is to get your resume in order. BellSouth chairman Duane Ackerman should be glad he lost...now if he can just get a Clue to this alternate strategy...
The pending merger of Travelocity and Preview Travel is also no slam-dunk. First, Sabre's (American Air's) 70% stake in the new outfit makes close attention by regulators a necessity. (Good thing they saw that and said they'll spin the thing out after the deal is done.) Second, the market goes to he who delivers the best pricing of the best service - for that click here or here. Size doesn't mean much when competitors are just a click away. Gatekeepers who try to dominate consumer sales channels eventually get hammered. (You hear that, Gigadollar?) It may take time, but on the Internet it's inevitable.
Clued-in are Paul Francisco and Frederick Petschauer of Taxnet Systems Inc. in Franklin Lakes, NJ. They have invented an elegant way to collect sales taxes on Internet sales by running them through the same programs credit card companies use to charge sales tax on their own services. (Special accounts are set-up for those who pay by cash or check.)
Clueless is the idea that electronic commerce will never be taxed . Politicians don't stay bought. (This goes for Republicans as well as Democrats.) Besides, I'd love to never pay taxes, too, but the result of that is anarchy, not liberty.
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