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E-Commerce:
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E-Commerce: Possible Catalyst in the Evolution of Entertainment & Specialty Projects One by one, businesses are finding ways to make money on the internet, selling the same goods and services they have been selling forever the old way. At the same time, internet-related services are popping up in retail locations, tapping into consumers’ needs or desires to get online while they’re away from home. For example, Cybersmith (212-655-4400) recently opened a 3,800 square feet. store at Castleton Square Mall in Indianapolis, Indiana. The store offers a game arcade, a business office, a classroom, a video studio, an Internet surfing area, a party zone and a restaurant. The store, opened in partnership with Simon Property Group, is part of an experiment by Simon to bring a new entertainment option to shoppers at its malls. Three additional Cybersmith locations are expected to open this year. If the experiment works, Simon plans to have Cybersmith stores available in all its malls, which draw 2.3 billion visits a year. ISP Get2Net (877-377-1849) recently opened Laptop Lane units in Cincinnati’s and Seattle’s airports. The cubicles, with locking doors, cost $8.95 per half hour where customers can plug in your own computer, or make use of a private phone line, a laser printer, a fax or a Pentium PC. A cyber concierge keeps users from missing their flight. Their slogan is "Peace, quiet and a T1 line." The company is working with Host Marriott Services to build internet-themed restaurants in airports with San Jose, JFK in New York and Los Angeles airports expected to get one this year. Financial services, information and other intangibles are the natural pioneers on the internet, but hard goods are hard on their heels. Book sellers (Amazon.com, BarnesandNoble.com, Borders.com), are out there in force, though Amazon has yet to turn a profit and its revenues are puny compared to its gargantuan market capitalization, due to the perceived value of its stock on Wall Street. According to the December 7 issue of U.S. News & World Report, 26 percent of retailers have Internet sites, 10 million households bought something via e-commerce; 48 percent of America Online's 14 million subscribers shop online; and e-shoppers spent $13 billion in 1998; Forrester Research predicts $108 billion in e-sales by 2003. Book sales accounted for 9.2 percent of those online dollars. Open questions remaining are: how many of those retailers’ web sites are actually set up to do retail transactions; and how many of those which are so configured are actually making sales? Home Depot is one major retailer with a web site. Click on their "Online Shopping" link and you get this message: "We at The Home Depot understand that there is a great demand for our products to be available on-line for the purposes of viewing, searching and yes, purchasing. Be assured that we are researching the best and most viable products for you to buy on-line. As soon as we are ready to provide you with the same great service and experience as a trip to your local Home Depot store, you'll be able to shop with us on-line!" Estee Lauder opened a direct internet outlet for its Clinique cosmetics last month; Levi Strauss began selling custom-fit jeans on its web site, an item not available to their retailers, at least not online. Pure online startups include Sparks.com, which opened this month selling personalized greeting cards; and Bluefly.com, which sells discount designer fashions. Then there are the internet middlemen who connect information and services with willing buyers. Prime examples are: Moverquotes.com, mortgagequotes.com and insurequote.com, operating under the umbrella of Microsurf.com, where consumers can type in their information and obtain instant, multiple quotes for the cost of a move, mortgage rates or pricing on auto, homeowners or life insurance. The quotes are provided by vendors who pay the site owners for their presence, and get direct leads, and possibly sales, from the site. InsWeb.com is another one of many sites offering comparison shopping for insurance, and includes health insurance along with auto, home and life. E-Loan.com and HomeShark.com offer mortgage quotes. Priceline.com, where you can "name your price" for airline tickets, hotel rooms, a new car, or a home mortgage. Then they put the bids out to vendors, who can either sell at the price specified or not. GoodNoise.com, where you can actually buy the music you want online, and download it instantly in a compressed MP3 format to play on your computer. This is one of the few internet retail operations that offers instant gratification, thus no waiting and no shipping charges two of the biggest consumer roadblocks to buying online. Online auctions are booming in popularity. One of the biggest is eBay.com, where you can be either a buyer or a seller of practically anything. Dozens, if not hundreds, of other businesses are getting into the online auction game, including Sharper Image, which plans to auction off discontinued merchandise using auction software from OpenSite. Some of OpenSite’s featured auction clients include: collectit.net, for collectibles; auctiongate.com, for computers and peripherals; rockauction.com, for used music and amplification equipment; winebid.com, for wine, of course; sportingauction.com, for sporting goods; curranscards.com, for sports cards; uspapermoney.com, for collectible currency; steinauction.com, for those fancy beer mugs; and gemauction.com, for gemstones, naturally. The obvious conclusion is that internet retailing is now a reality, and is only dependent upon the online consumer base reaching critical mass and the technology to reach critical speed. Industry gurus claim it will be only a few years until the television, computer and telephone are seamlessly integrated into a single, voice-controlled instrument connected full-time to the internet via fiber optic lines, giving everyone virtually instant, hands-free (typing free) access to practically anything or anyone in the world. The big question is, can online shopping ever replace, or even make a dent in, land-based retailing? Will people buy clothing, wallpaper, lighting fixtures, home decor, and other touch-and-feel products without touching and feeling them? Will they ever be willing to wait three days to three weeks to get what they bought? Will they actually get better deals (shipping charges included) than they would get at the store? Will the internet ever be anything more than digital mail order? People remain people, regardless of the gadgets they use. We are a social animal. We still want to go out, tool around in our cars, gawk at new stuff, watch other people, see a movie, get something to eat, try on clothes. Touch and feel, see and smell, taste and test. You can’t pump that through a wire. Not yet... |