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New year trends in I-commerce

New year trends in I-commerce

Internet commerce really started to rev up during '97 and it looks set to get even bigger in '98. What trends should you be looking out for in the coming year?

Internet commerce got hot in 1997 and it's a safe bet that it will become even hotter in 1998. With an ever-increasing number of people getting on the Web (between 40 million and 60 million at last count), and with corporations looking for ways to conduct their businesses more efficiently, the amount of commerce happening on the Internet can only increase.

But along with the general growth in online commerce, there are some specific trends to watch for this year.

Business-to-business I-commerce growth will outstrip consumer I-commerce. In 1997, consumer-oriented commerce got most of the press - however, it was in business-to-business commerce that the real action was happening. Expect that trend to continue in 1998.

It's easier for an IT manager to demonstrate return on investment for a business-to-business extranet than for a consumer I-commerce site, because extranets can produce quantifiable savings.

Your company's trading partners aren't going anywhere, and they'll generally welcome any technology that makes it easier for them to deal with your company. If your extranet solution is implemented correctly, it will significantly cut the cost of doing business with these partners.

On the other hand, the consumer market on the Internet is still largely fragmented and uncertain. There is no doubt that there's money to be made selling products and services to consumers on the Internet, but there's also greater risk in these ventures.

Secure Electronic Transaction (SET) will spread, but slowly. The SET standard was finally approved in 1997, and the first SET-based products appeared last year. That makes it possible for merchants to implement SET-compatible sites for the first time, and many pilot programs are already under way.

To foster the spread of SET, credit card com-panies such as Visa and MasterCard will offer lower rates to those merchants who use SET.

But SET will grow slowly because there's already an effective, convenient standard in place for consumer Internet transactions - Secure Sockets Layer (SSL). This is the solution favoured by most online merchants because it's easy to implement, it is already built into most Web servers' browsers and consumers are feeling more and more comfortable giving out their credit card numbers on a secure connection.

SET however, requires merchants to install new, SET-compatible transaction processing software while consumers need to install "wallet" software on their PCs. These inconveniences are likely to slow acceptance of the standard.

I-commerce solutions will be increasingly integrated into legacy systems. In 1997, many companies put up their first I-commerce sites, often by adding a rudimentary catalogue and order form to their existing Web sites.

These seat-of-the-pants I-commerce solutions are expedient, but they're not very effective in the long term and they often end up creating more work than they save.

This year, many of these sites will be updated to the next generation. An I-commerce site needs to be linked into a company's back-end data systems so it can provide customers with the latest information about product inventories, shipping status and account status.

A well-integrated I-commerce system provides customers with valuable services they can't get anywhere except on the Web, and at the same time it helps the merchants to streamline their business processes.

A few community-oriented commerce sites will succeed, but most will fail. Creating a community around your company and products is a great idea and it's an effective way to build brand awareness, loyalty and market share. But communities are difficult to establish and maintain. If you want to benefit from communities of interest, your company needs to make a serious commitment to taking care of them.

That means, for example, dedicating staff to answering questions and fostering discussion. It means responding to customer feedback. In short, it's a serious "time and money" commitment and if you don't make it - as many companies will not - your would-be communities will shrivel on the vine.electronic data interchange (EDI) will get a boost from the Internet. Far from being replaced or eliminated by Internet-based commerce, EDI - the 20-year-old electronic commerce standard used by many government, manufacturing, and retail corporations - will become more widespread than ever.

EDI solutions used to be expensive and time consuming to implement - reliant as they were on proprietary value added networks (VANs), expensive EDI system integrators and complicated standards.

That kept smaller companies from playing the EDI game, unless they were subsidised by their bigger trading partners.

But now even the smallest resellers can do EDI business by using inexpensive Web-to-EDI translation services and by using the Internet as a transport instead of costly VANs.

Besides, the big companies that have already implemented EDI solutions aren't going to just throw away years of investment. Instead, they'll be looking for ways to make that investment pay even greater dividends. EDI via the Internet is one way to do that.

Dylan Tweney can be reached at dylan@infoworld.com


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