American shoppers, when first presented with the interesting idea of shopping from the comfort of their own homes without having to fight traffic and annoying salespeople, responded almost instantly and overwhelmingly, and the idea of e-commerce was born. From its very beginning, the concept was a resounding success, and the number of online e-tailers has grown exponentially, from a handful of small business entrepreneurs to online auction sites, and then to giant corporate monsters like Wal-Mart and Target, and even high-end department stores like Neiman-Marcus. Most e-commerce entrepreneurs believed that they could sell virtually anything in virtual storefronts, and do it better than they ever could in a brick-and-mortar retail store.
Although online shopping offers endless possibilities for consumers and the business of e-commerce is still booming, retailers have discovered that e-commerce wasn’t quite the flawless marketing strategy they had imagined, and some businesses failed as a result. The main reason for the failure of some e-commerce stores is simple: a lot of investors and online shopkeepers didn’t stop to realize that for some items, consumers don’t want to purchase items blindly without seeing and touching them first. And now the e-commerce craze is beginning to spread to mobile commerce, or "m-commerce," with consumers doing their Internet shopping using wireless devices such as cell phones. Making online shopping available on the road will supposedly transform the economy by allowing people to shop from wherever they happen to be—sitting in a waiting room, riding on the subway, even driving to the beach or stretched out on a hammock. But as enticing as the idea may seem, Roger Blackwell, a professor of marketing at Ohio State University, is skeptical about the success of m-commerce.
Co-author of "Customers Rule! Why the E-Commerce Honeymoon is Over," Blackwell believes that some people haven’t learned the lessons of e-commerce gone awry. "These glowing predictions of m-commerce are becoming very popular, but they are as absurd as the predictions that we're all going to be buying our groceries over our home computers." As an example, Blackwell points to the online grocer Webvan, which went out of business in July 2001. "M-commerce has some very specific applications that will be successful, just as we saw with e-commerce. But many of the proposed uses of m-commerce just won't work."
Blackwell believes that in general, people could care less where they buy their products and services, whether from a storefront or a Web site, and their main concern is getting whatever meets their needs the best, at the best price for their budget. However, many entrepreneurs trying to cash in on the e-commerce boom assumed that they could sell anything over the Internet and do it better (and cheaper) than if they opened up a retail store. Blackwell claims that the main problem with this reasoning is that the Internet is a great tool for selling digital products, such as electronic airline tickets, or items that are hard to find, like out of print movies, rare books, or clothing in a particular size or color. But for many products, people want to be able to evaluate firsthand before forking out the dough to buy them, especially higher priced items. And in some cases, people won’t even consider buying anything from a place where they can’t deal directly with a real person. "These are all fundamentals of marketing that business students are taught. Anyone could have predicted which products could be sold profitably over the Internet, but many entrepreneurs and investors were caught up in that irrational exuberance," Blackwell explains.
Blackwell holds that an important lesson learned by businesses who failed in their attempts toward e-commerce was that companies shouldn’t adopt technological advances purely because of the technology. The latest breakthroughs must make life easier for consumers, or they will not embrace it, and online retailers will fail. That reason alone makes Blackwell skeptical about the future of m-commerce. "I've heard people say that one promising application of m-commerce would be that when customers walk by a grocery store, their cell phone will ring with a message that ketchup is on sale. People are actually saying things like that. That's not how consumers make choices." Blackwell further explains why e-commerce can sometimes be more successful as a way of selling a company rather than selling a product. "When people were thinking of the Internet as a way to sell, they should have been seeing it as a way for consumers to learn more about a company and its products. You can't download a donut from your computer, but you can find the location of the nearest donut shop. That's the way most consumers use the Internet."
Despite his skepticism, Blackwell does acknowledge that there are situations where m-commerce might take hold and become "the next big thing" for some online shopping purposes. One such application would be allowing people to return a rental car and get their bill over a cell phone without having to stand in line at the rental counter. "If people evaluate how consumers really behave, they should be able to see which m-commerce applications are fads and which will have longevity in the marketplace," Blackwell points out.
Although online shopping offers endless possibilities for consumers and the business of e-commerce is still booming, retailers have discovered that e-commerce wasn’t quite the flawless marketing strategy they had imagined, and some businesses failed as a result. The main reason for the failure of some e-commerce stores is simple: a lot of investors and online shopkeepers didn’t stop to realize that for some items, consumers don’t want to purchase items blindly without seeing and touching them first. And now the e-commerce craze is beginning to spread to mobile commerce, or "m-commerce," with consumers doing their Internet shopping using wireless devices such as cell phones. Making online shopping available on the road will supposedly transform the economy by allowing people to shop from wherever they happen to be—sitting in a waiting room, riding on the subway, even driving to the beach or stretched out on a hammock. But as enticing as the idea may seem, Roger Blackwell, a professor of marketing at Ohio State University, is skeptical about the success of m-commerce.
Co-author of "Customers Rule! Why the E-Commerce Honeymoon is Over," Blackwell believes that some people haven’t learned the lessons of e-commerce gone awry. "These glowing predictions of m-commerce are becoming very popular, but they are as absurd as the predictions that we're all going to be buying our groceries over our home computers." As an example, Blackwell points to the online grocer Webvan, which went out of business in July 2001. "M-commerce has some very specific applications that will be successful, just as we saw with e-commerce. But many of the proposed uses of m-commerce just won't work."
Blackwell believes that in general, people could care less where they buy their products and services, whether from a storefront or a Web site, and their main concern is getting whatever meets their needs the best, at the best price for their budget. However, many entrepreneurs trying to cash in on the e-commerce boom assumed that they could sell anything over the Internet and do it better (and cheaper) than if they opened up a retail store. Blackwell claims that the main problem with this reasoning is that the Internet is a great tool for selling digital products, such as electronic airline tickets, or items that are hard to find, like out of print movies, rare books, or clothing in a particular size or color. But for many products, people want to be able to evaluate firsthand before forking out the dough to buy them, especially higher priced items. And in some cases, people won’t even consider buying anything from a place where they can’t deal directly with a real person. "These are all fundamentals of marketing that business students are taught. Anyone could have predicted which products could be sold profitably over the Internet, but many entrepreneurs and investors were caught up in that irrational exuberance," Blackwell explains.
Blackwell holds that an important lesson learned by businesses who failed in their attempts toward e-commerce was that companies shouldn’t adopt technological advances purely because of the technology. The latest breakthroughs must make life easier for consumers, or they will not embrace it, and online retailers will fail. That reason alone makes Blackwell skeptical about the future of m-commerce. "I've heard people say that one promising application of m-commerce would be that when customers walk by a grocery store, their cell phone will ring with a message that ketchup is on sale. People are actually saying things like that. That's not how consumers make choices." Blackwell further explains why e-commerce can sometimes be more successful as a way of selling a company rather than selling a product. "When people were thinking of the Internet as a way to sell, they should have been seeing it as a way for consumers to learn more about a company and its products. You can't download a donut from your computer, but you can find the location of the nearest donut shop. That's the way most consumers use the Internet."
Despite his skepticism, Blackwell does acknowledge that there are situations where m-commerce might take hold and become "the next big thing" for some online shopping purposes. One such application would be allowing people to return a rental car and get their bill over a cell phone without having to stand in line at the rental counter. "If people evaluate how consumers really behave, they should be able to see which m-commerce applications are fads and which will have longevity in the marketplace," Blackwell points out.
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