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The Emerging Business
and the Internet:
Part Seven


See also:
Electronic Commerce (eCommerce)

          Our examination of opportunities for the smaller business on the Interest have addressed the first three of the four questions of communications. Our attention can now be directed to the final question, "What response are we seeking from them?"

          Although often veiled in reticence, the simple response we are seeking is: "Buy!"  Our opening premise was: "We establish a Web presence because we believe it is a way to strengthen market position and enhance earnings."  The smaller business cannot afford the money or the management time to have a Web presence that fails to generate incremental sales or to measurably enhance traditional sales. Despite all the hype and glamour, whether or not to maintain a Web presence is a hard-headed business decision.

          Let us look at the familiar example of L.L. Bean as a very basic model of doing business on the Internet. Of course, one accesses this site through an inviting welcome (home) page [], and is given the option of a number of branchings: what’s new - products - free catalogs - how to order - feedback - search - site index. Naturally, "What’s new"  presents new merchandise encouraging the viewer to re-visit the site frequently. "Products"  is an online catalog with a good table of contents leading the viewer quickly to merchandise of interest; significantly, these pages note "[Our Concerns about Monitor Color Accuracy]"  reminding viewers that computer monitors may not portray merchandise colors faithfully. "Free catalogs"  facilitates the viewer requesting via pre-addressed email traditional L.L. Bean catalogs; i.e.,  being added to Bean’s sophisticated mailing lists.

          The other branchings are self-explanatory, but "How to order"  warrants special consideration. L.L. Bean has not yet introduced a secured online payment protocol and, therefore, advises its customers, "We do not accept orders via e-mail due to our concerns about the security of your information."  Three methods of payment are suggested: By telephone using a 24-hour (800) number, and two rather cumbersome procedures for downloading an order form, filling it in, and then FAXing it to Bean.

          The L.L. Bean site is representative of most good business sites today. It presents a complete and continuously updated catalog of products/services offered, it is inviting and fast to use, it is accessible from wherever one has a laptop computer and a modem, and the catalog is never lost or misplaced. But it is still easiest to place the actual order conventionally, viz.,  dial the (800) telephone number and deliver the order verbally to a pleasant telephone order clerk.

          This site can track the actual sales attributable to L.L. Bean’s Web presence, and can readily provide periodic category analyses of these incremental sales. It aggregates new names to be added to Bean’s notable mailing lists, presumably much better names than can be secured through list brokers. "Feedback"  offers an inexpensive and flexible way of undertaking market research and assembling typical customer profiles. It may also be observed that every "visit"  leaves an email "fingerprint"  that can be captured by the Web server; while these email lists could be used for future unsolicited "emailings,"  current "Netiquette"  frowns upon such practices and occasionally sparks spontaneous retaliation ("flaming").

          L.L. Bean is one of many effective Web sites that can be readily emulated by the smaller business. Considerable progress is being made to guarantee the customer a safe and secure environment for the completion of an entire transaction online. Since the routine transmission of data via email is vulnerable to mischievous or felonious interception, confidential information such as credit card or bank account data should never be transmitted via unprotected email. RSA Data Security Inc. and the Cylink Corporation have both developed 128-bit secret-key patented encryption technology to protect the online transmission of confidential data. Netscape Communications Corporation, Sun Microsystems Inc., and CyberCash Inc. are engaged in a joint venture to develop and market a standard software that both merchants and consumers can employ to facilitate secure online payments.

          However, today, the available technology is still complex and, consequently, expensive. Only about 100 large companies are reportedly accepting online payments made with CyberCash software. Therefore, the smaller company is counseled to defer consideration of an online payments system and follow the current L.L. Bean example. While secured online payments systems will ultimately streamline the vendor’s operations, order placement via an (800) telephone service will continue to be appealing to most customers.

          Although the jargon is different and foreboding to the uninitiated, the decision whether, why and how to establish a Web presence must be approached with the same sound quantitative analysis we would employ for any other business decision. We establish a Web presence because we believe it is a way to strengthen market position and enhance earnings. The performance of a Web site must be monitored quantitatively and continually to assure ourselves these expectations are being met.

Your comments and suggestions for these pages are most welcome!

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Thomas A. Faulhaber, Editor

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Revised: August 26, 1996 TAF

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