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Non Traditional Clicks and Mortar Businesses:

(Dinosaurs) Learn to Fly    


E-commerce is not the kiss of death for big, traditional brick-and-mortar business.  However, it does means that business-as-usual is forever changed.  Adaptation is imperative for survival. 

E-commerce is the exchange of value electronically across enterprises or between enterprises and customers.  Technologies such as Internet protocol (IP), web browsers, web application servers, and hypertext markup language/extensible markup language (HTML/XML) have made it possible.  Adopted at breakneck speed, E-commerce racked up 1998 sales of $300 billion in the US.  In the US, it is projected to be worth $970 billion by 2002.   

E-commerce creates new business life forms such as dot.com startups, new food chain intermediaries such as application service providers (ASPs), and innovative commerce transactions such as online auctions.  Comparison between the dot.com companies and traditional business reveals two very different traits.  dot.com companies are characterized by little-to-no earnings and stratospheric market caps while traditional business are the exact opposite.  What is evolving is a hybrid, called clicks and mortar.


Five Levels of Evolution

The evolution from traditional business to E-commerce means undergoing five levels of change.  

·        Level 1 (static) is merely putting information on the Internet.  The customer grabs data from the web site with this low cost, HTML-based delivery methodology. 

·        Level 2 (interactive) is dynamic information delivery with 2-way communication.  Customers can search catalogs for goods, check status of orders, and personalize content with such online merchandising. 

·        Level 3 (transaction) is integrating secure financial transactions into core systems like business-to-business (B2B) ordering, provisioning, billing, and payment.  There are analytical tools and capabilities for personalizing information.  This translates into better customer service and offerings. 

·        Level 4 (transformational innovation) is E-business where new products, services, and brands become available as offerings.  Changes to the industry value chain also occur.  Interaction is driven by the lifetime value of the customer.  Highly personalized service across all delivery channels become routine.  It requires both front end and back end system and business integration where both operate as one enterprise. 

·        Level 5 (self-adapting organization) is E-business plus.  This is characterized by extended, leveraged knowledge management about partners and customers; continuous learning in decision making; customer value management; and value chain management.


Can Traditional Businesses Compete?

Traditional businesses can effectively compete for E-commerce because they are established.  They have “the goods” when it comes to production and delivery capabilities.  They also own “the content” when it comes to intellectual property, databases, entertainment, and well-known brands.  They have a proven track record for working together with suppliers, channel partners, and complementary business partners.  Their deal making skills, capabilities, and capacity are known from previous successes.  Furthermore, they have the brainpower of skilled people and a system for managing customer relationships and production.  Finally, their customer base is the most important asset of all.


Can Traditional Businesses Survive?

In 1998, E-commerce captured one percent of the US gross domestic product (GDP) of $32 trillion.  By 2002, estimates for E-commerce are less than seven percent.  E-business is where the real action will be.  Therefore, survival is a matter of traditional businesses making an evolutionary leap into the electronic medium.  They must develop a new business sense, grow smarter, and add new capabilities conducive to the Internet.  The business climate has just started to change and there is time to adapt a clicks and mortar strategy.

E-commerce savvy means

·        focusing on the customer’s itinerary using Level 5 tactics,

·        establishing partner integration via extended intranet and internet tools, and

·        harnessing legacy customer/partner information. 


Growing smarter means 

·        using E-commerce for strengthening existing relationships and making new ones;

·        creating a digital nervous network with reactive, intranet capabilities and systems;

·        building intelligent, multi-channel relationship management processes, and

·        applying advanced decision analytics that define the new E-business instinct.


Survival Plan and Strategy 

Surviving and thriving the coming of E-commerce means executing a strategic plan.  The plan should have the following steps: 

·        Empower a Chief E-commerce Officer who can pull together lines of business and lead them in one direction.

·        Implement basic E-commerce capabilities immediately.

·        Leverage corporate assets to do things that the dot.com challengers can not.

·        Inspire a climate of creativity, technical sophistication, and optimism for transformation.

·        Expect reinvention to be gradual but timely and with the continual motivation to succeed.


Final Thoughts

Web sites are under continual change and renovation.  Experimentation and testing what works is “normal” on the Web but must be done at an aggressive pace.  It is important to know where the business is going and how it is using E-business to either supplement existing commerce or establish new business.  Be aware of the following common mistakes made when entering E-business: 

·        Underestimating the marketing required to drive attention to your web site – also known as the “If they build it, they will come” fallacy.

·        Not getting partnership/supply chain relationships dealt with from the beginning.

·        Underestimating the E-business response volume and the absolute demand for supporting 24-7 infrastructure.


Read More articlesTraditional Bricks and Mortar, Defining Competitive EBusiness Strategy, Zen and the Art of Business Intelligence, Consumer Marketing and Online Strategies for ROI, Build Versus Buy, Intentions based Business , E-Business through Person to Person Communication, ASP Apps on Tap, Innovation without Compromise on Internet Time, E-Business the Outside is now InEric Greenberg How to win in E-Business, Paul Otellini Revolutions in the Internet Age, Halsey Minor Running on Internet Time.  

Written and Edited by Judy Kong, Editor TechDivas, in a report on the ICE Conference, Copyright 2000 - Diva Networks, All rights reserved