E-Commerce and Small Business - A Recipe for Success

Doing business on the Internet is a great opportunity and it seems

like everyone is doing it. Unfortunately, putting a website on the net
is similar to launching a rowboat into the ocean. It is a vast and
unforgiving frontier that devours many businesses banking of the e-
commerce boom. This sounds intimidating but it should not be that
way. If the people responsible for a business follow six simple
guidelines, they will greatly enhance the chances that their
business will succeed and possibly flourish in the e-commerce
world.
1. Every business considering a website for e-commerce purposes
must develop an underlying strategy. This is critical! After all, just
posting a website probably will not draw substantial traffic. The
target audience needs to be educated about the existence of the
site. Developing a strategy will force you to consider your approach
toward the Internet and help set realistic goals. Without quantifiable
goals it will be impossible to gauge whether your investment in e-
commerce is successful or not.
2. Simplicity is King. Many businesses attempt to enter the Internet
and e-commerce with a huge splash. The result is over-engineered
sites that are complex and cumbersome. If the website navigation
is complicated or the pages load slowly, the potential customer is
likely to become frustrated and abandon your site for happier
surfing elsewhere. Therefore, maintain a customer focus and make
the site simple. In addition, give the potential customer alternative
choices in doing business with you. Some people like to do
research on the web but would rather call or visit when they are
ready to buy. Give them the telephone number and the address on
every page. In addition, careful consideration must be given to
design. Pay particular attention to how the site is laid out. Are items
on the page aligned or not? Do not mix alignments. If you center
one piece of information, center everything and vice versa. Also,
make sure to use text colors that have good contrast with
background colors (Black text on a white background has the best
contrast). Finally, do not put large picture files or so many picture
files into your page that it takes forever to load. If it takes more than
thirty seconds, it is too long.
3. Evaluate your products or services for compatibility with an e-
commerce environment. For example, many people are not
comfortable with buying clothes over the Internet. They want to try
clothes on before they buy them to make sure they fit or that they
look good in a particular style. On the other hand, books or
computer equipment, sell well in an electronic environment
because people know what to expect from the product. If you are
not sure if your product or service is a good fit with the Internet,
survey your target market to see if you can learn what they think
about e-commerce and your product.

Net Users Worldwide Taking Commerce Online
By Michael Pastore
In between dot-bomb jokes and pink-slip parties, it's easy to forget
that Internet use is still growing at a pretty good clip worldwide,
and more users means more e-commerce transactions. Nearly 1
billion people, about 15 percent of the world's population, will be
using the Internet by 2005, International Data Corp. (IDC) found,
and their use will fuel more than $5 trillion in Internet commerce.
That represents a staggering 70 percent compound annual growth
rate when compared to Internet spending of $354 billion in 2000.
"With the dot-com stock crash and U.S. economic doldrums so
much in the news, it's easy to lose sight of the explosive growth in
Internet usage and commerce taking place below the surface," said
John Gantz, IDC's chief research officer. "More than 100 million
new users come onto the Web every year, and corporate volume
purchasing over the Web is just getting cranked up. Add to that the
proliferation of mobile phones and other Internet access devices
that will allow people to access the Internet anytime, anywhere, and
you have a scenario for explosive growth."
With the much-publicized periods of hypergrowth over, and with the
mature markets topping out, Internet use in the coming years will
be widespread, as opposed to dominated by a single region. In
2000, the United States accounted for 34 percent of Internet users,
with Europe at 29 percent, Asia-Pacific (excluding Japan) at 16
percent, Japan at 10 percent, and rest of world at 11 percent. But
growth in the number of Internet users in Asia-Pacific and the rest
of the world -- especially in Latin American countries -- will quickly
outpace growth in more developed countries such as the United
States, Canada and major European nations. By 2005, the balance
of Internet users will completely shift, with Asia-Pacific rivaling
Europe for the most Internet users while the United States slips to
third place.
Similar shifts will occur among e-commerce. The United States
currently accounts for just under half (46 percent) of total e-
commerce. By 2005, however, its share will dip to 36 percent,
according to IDC.
"The U.S. share in 2005 is actually more in line with its position in
the offline economy, representing the shift in e-commerce from an
emerging market to a more mainstream industry," said Carol
Glasheen, vice president of IDC's Global Market Models and
Demand-Side Research program. Growth in e-commerce in all
regions will be healthy, but Asia-Pacific and Western Europe will
grow the fastest between 2000 and 2005.
According to the First Quarter 2001 Global Internet Trends report
from Nielsen//NetRatings, one in six European adults used the
Internet to seek pricing or product information for products and
services. One in 11 adults actually made an online purchase in the
same period. Denmark, Sweden and Switzerland led the region in
terms of Web-based browsing and purchasing, while
Belgium/Luxembourg, Italy and Spain had relatively few people
browsing or purchasing via the Internet.
Half of the Europeans who have browsed for information in the past
six months have purchased, with browsing to purchase rates
highest in Britain, Norway and Sweden. Italians and Spanish, on
the other hand, are more reluctant than other Europeans to buy
after having sought product information online. According to
Nielsen//NetRatings, only Sweden comes close to the United
States, where 74 percent of all Web surfers shop online each
month and 30 percent buy online.
In the Asia-Pacific region, adults in Australia and New Zealand are
most likely to use the Internet to seek information about products
and services, with one in four adults turning to the Net. Purchasing
online is also common in Australia and New Zealand, as well as
South Korea. Only a very small proportion of people in Hong Kong,
Taiwan and Singapore have bought goods and services online.
"If a South Korean browses the Internet for information on goods or
services, he or she is much more likely to buy than is the case in
other countries," said Richard Goosey, chief of measurement
science and analytics for ACNielsen eRatings.com. "Three in five
South Koreans who browse convert that investigation into a
purchase. By contrast, only one-third of adults from Hong Kong or
Taiwan who browse for information then go on to buy."
Worldwide Online Browsing and Purchasing Behavior
Past six months, adults 16+
Nation
Browsing for
Products
Purchasing
Products
Australia 24% 10%
Austria 25% 12%
Belgium/Luxembourg 12% 5%
Denmark 39% 16%
Finland 28% 11%
France 12% 6%
Germany 22% 11%
Hong Kong 13% 4%
Ireland 17% 8%
Italy 10% 3%
Netherlands 28% 11%
New Zealand 29% 12%
Norway 24% 14%
Singapore 19% 7%
South Korea 18% 11%
Spain 8% 3%
Sweden 46% 26%
Switzerland 32% 17%
Taiwan 13% 4%
UK 19% 11%
United States 74% 30%
Percentage of Population
Using the Internet
Canada 38%
Australia 25%
Singapore 25%
USA 25%
New Zealand 24%
UK 15%
Germany 14%
Hong Kong 14%
Taiwan 12%
France 11%
Philipines 8%
Malaysia 7%
China 4%
South Africa 2%
Thailand 2%
Indonesia 1%

E-Commerce, Mobile Access Drawing Interest from Net
Users
By Michael Pastore
As the official ISP of some 25 million subscribers, it's in America
Online's best interest to see what Internet users do on the Net,
think of the Net, and perhaps most importantly, have in store for the
Net. For the third year, AOL had Roper Starch conduct its
Cyberstudy of Internet users.
This year's study found that online e-commerce activities have
exploded into the mass market, as millions of consumers discover
services like shopping, banking, news, stocks, and health
information. The study also shows a strong and growing demand
for access to the online medium through cell phones, TVs, voice
portals, and other non-PC devices.
According to the study, online commerce has become an everyday
activity for millions of users. This year, more than half of the
survey's respondents (56 percent) say that they currently shop
online, nearly double the percent of those who did in 1998 (31
percent). Similarly, as the holiday season approaches, the percent
of users who say they intend to shop online during that period has
doubled from 14 percent in 1998 to 28 percent today.
"Two years ago, most online users were only dipping their toes in
the electronic commerce pool, but this year, they're diving right in,"
said Marshall Cohen, America Online Senior Vice President of
Brand Development. "With a majority of users saying they now
shop online and 80 percent saying they research products online
before buying something, we're seeing a true coming-of-age for
electronic commerce."
In addition to shopping more frequently,
consumers are also spending more
when they shop online, with the percent
of respondents who say they spent
more than $500 online in the previous 3
months jumping by more than one-third
over the past year (from 19 percent in
1999 to 26 percent now). The percent of
users who say they plan to increase the
number of online purchases they make
in the next few years has jumped to 49 percent from 41 percent in
1998, and when the timeframe is expanded, 40 percent of users
think they will do "almost all" of their shopping online within 10
years.
Internet Use, 1998 vs. 2000
Use 1998 2000
Shop online 31% 56%
Intend to
shop online
in future
14% 28%
Plan to increase
online purchases
41% 49%
Banking 16% 25%
Trading stocks 11% 16%
Source: AOL/Roper Starch Cyberstudy
In addition to shopping, there has been extremely rapid growth in a
wide range of other online activities -- from banking (up from 16
percent to 25 percent since 1998) to trading stocks (up from 11
percent to 16 percent since 1998) and booking travel reservations
or tickets (up from 32 percent to 49 percent since 1998).
Online research is now a standard part of the buying process with
80 percent of online users saying they research products online
before they make a purchase. The majority of users also get news
(76 percent), health information (70 percent), and local
entertainment info (50 percent).
As users grow accustomed to integrating the online medium in their
everyday lives, they are also increasingly demanding access to it
from any place, at any time.
More than half of users (54 percent) say they would be interested in
using a small Internet device to go online from any room in the
house, and just under half (46 percent) say they would be
interested in having their e-mail read to them by calling a special
phone number. Nearly half of users (43 percent) already log on to
their home accounts even when they are away from home, up from
36 percent in 1999. If they own a laptop, more than a third (37
percent) users checks his or her e-mail account when traveling for
business, and 32 percent do so when traveling on vacation.
Looking ahead to a much more fully wired world, 60 percent of
respondents believe that within 10 years, every room in their house
will be wired for Internet access. And showing the potential for
wireless devices, 63 percent already also own at least one cell
phone.
"As people get used to online services and convenience, they
increasingly want to be able to do their favorite online activities
regardless of what room of the house or what part of the world they
happen to be in," Cohen said. "That increased consumer reliance
on popular online services can be seen in strong and growing
demand for Internet-accessible cell phones, PDAs, two-way
pagers, small kitchen devices, and TV set top boxes."
More than half of online users (53 percent) have a computer and
TV in the same room of their house, and 60 percent say they
currently watch TV and go online at the same time. Additionally, 51
percent say they would be interested in checking their e-mail
through their television, and two-thirds of online users (67 percent)
would be interested if they could check out a Web site they'd seen
on TV without getting up from the TV to find it.
E-mail addresses have become such a pervasive part of an
individual's identity that 75 percent of Internet users expect more
people to know their e-mail than their phone number in the future. A
full half of online users (50 percent) now say that they prefer to use
e-mail instead of the telephone (34 percent) to communicate with
business associates.
As people spend more time online, the study found they're also
spending less time doing more traditional media activities. More
than a third of users (34 percent) say that they are watching less
TV since they started going online, up from 26 percent a year ago.
Finally, online users are unambiguous about their views on privacy,
with virtually all of the respondents (94 percent) saying it is "very
important" that their privacy and security are protected while online.
America Online commissioned Roper Starch Worldwide to produce
a random survey of 1,004 adults (ages 18+) who subscribe to an
Internet or online service at home. Interviews were conducted via
telephone in August 2000. The results have a +/- 4 percent margin
of error.