Saturday | 10 January, 2009
CIO
Complex Commerce
Scott Kirsner 11 August, 1999 16:42:46

Amazon.com has it easy. Shoppers in search of a hot CD or a best-selling novel browse through the site and pick out a handful of simple, shrink-wrapped products that can easily be shipped. Ka-ching, ka-ching, ka-ching.

E-commerce isn't quite so elementary for most companies. What if you sell a product that requires configuration or carries such a hefty price tag that buyers need some handholding before they commit? Perhaps your customers expect solutions that will integrate seamlessly with systems they have already purchased. Or maybe you simply sell a groundbreaking new product and would-be buyers have scads of questions.

"Most of the commerce we see on the Web today is what I call pick-and-pay e-tailing," says Christopher Risley, CEO of NewChannel , a software company based in Redwood City, Calif. "I'm talking about sites like CDNow and Dell and eToys.com. But when you look at the projections for what e-commerce will look like in 2010, that kind of e-tailing accounts for only 13 per cent of all e-commerce," he says. "The other 87 per cent have a more complex sale-things such as furniture, financial services or aircraft. There's a reason the e-tailers have been first out of the gate, though. The technology enablers aren't there to support the other kinds of commerce." Eighty-seven per cent is a nice, big number, and Risley's company, along with a handful of other vendors like On-Link Technologies, Acuity and Calico Commerce, are angling to be the dominant "technology enablers" of complex e-commerce. "Complex selling is really just getting underway," says Roy Satterthwaite, a research director at GartnerGroup in Stamford, Conn. "The trick is figuring out how your customers buy rather than designing a system online that forces them to buy in a new way." Most companies have tried to solve the problem by publishing detailed product information on the Web, and that's a solid first step. After all, when most customers start thinking about a purchase, the first thing they do is gather data. Beyond that, though, complex commerce has three basic elements: configuration, consultation and integration.

Configuration

In the pre-Web days, only salespeople had access to the software tools that let them configure products and services and determine pricing based on a customer's needs. That has changed, and now a core requirement for doing sophisticated commerce on the Web is designing a configuration tool that's easy for untrained, time-pressed customers to use. Networking companies such as Cisco Systems and Cabletron Systems were among the first to give visitors to their site the ability to mix and match various routers, hubs and other components.

"There's a big human interface issue [with configurators]," says Peter Kirby, a managing director at Mainspring, a Cambridge, Mass., research company. "The big question is, 'How do you take people through it in a way that's simple enough to understand?'" One company that has solved that problem is Kansas City, Mo.-based Sprint PCS, which markets wireless phones and accompanying service plans. Using the Advisor software that Sprint PCS developed, a visitor to the site answers a short list of questions about calling habits and wireless phone usage. In a process that takes less than five minutes, the site is able to accurately recommend the appropriate wireless phone and service plan, which customers can order online.

When configurators work well and are designed for ease of use, they serve as Step 2 in the customer buying process. Configurators can answer questions such as, "What model do I need?" and "How will this product work with the platform I already have?" and "Which components go with which other components?" They also bring down operational costs. "In the past, you had an engineer or a sales rep doing [configuration] for the customer," says Satterthwaite at GartnerGroup. "Their time was measured in hundreds of dollars per hour. The difference is, your Web site's time is measured in terms of cents per hour." Consultation On your third visit to Furniture.com to try to assemble a bedroom set for your new house, don't be surprised if a stranger asks you to chat. The Framingham, Mass.-based furniture retailer has deployed technology from NewChannel that lets one of 15 design consultants offer real-time assistance to shoppers.

"We can monitor where people are on the site, and if we think they're a hot prospect or they need assistance, we can send out a chat window," says Lee Chaissan, Furniture.com's vice president of engineering.

About 60 per cent of shoppers accept the help. "Maybe a customer is looking for a sleigh bed but wants something more high-end than they're finding in the search results," says Chaissan. "Our consultants can push images or pages. And this summer, we're launching a Java applet that will let our consultants work with customers to design entire rooms and houses," Chaissan adds.

Furniture.com has discovered that consultation is essential to its success, a rule that is true for many other companies pioneering complex commerce. "Our business is high tech and high touch," explains Andrew Brooks, the company's president and CEO. "Our consultants can help customers navigate the Web site and the online purchase process, but they can also help them understand what [things] look and feel [like] and what fabrics integrate with their existing pieces." The design consultants seem to be working well for Furniture.com: Brooks brags that the company's average revenue per order is more than $1,000.

There are other benefits to live consultations. "If you can answer a customer's questions quickly-before they zip off to some other site-you'll sell more," says Dean Cruse, Acuity's vice president of marketing. "Live, human contact makes it much easier to upsell and cross-sell too." Integration Risley at NewChannel jokes that the odds are slim that a random visitor perusing Bechtel Group 's Web site will pull out a credit card and buy a suspension bridge.

Still, the further Bechtel can push that visitor along in the sales process-to the point where he is ready to begin talking with a skilled salesperson-the more likely it is that Bechtel will make the sale. "When somebody has set aside 10 minutes of their life to learn about how Bechtel builds bridges, that is a magic moment," he says.

Taking advantage of those magic moments will likely require attention from salespeople or channel partners (although complete automation may be an option for some forms of complex commerce). That means that the very way you interact with prospects and customers for every sales channel needs to be integrated.

"Imagine you're buying a lawnmower," says Matt DiMaria, vice president of marketing at Calico Commerce , an e-sales software company in San Jose, Calif.

"You may start the buying process on the Web and narrow down your choices to a few different models. But then you might want to pick up the phone and talk to someone or go into a physical store. Each channel has to support the rest." Moreover, each channel should also know about customers' stated preferences, their purchase history and where they are in the buying process. That means that the salesperson-whether a manufacturer's rep or a distributor's rep-isn't on the way to extinction (though his or her role will certainly change).

"Salespeople aren't going away," insists Buck French, CEO of On-Link Technologies , a Redwood City software manufacturer. "But their time will get used more productively. A great salesperson understands the hot buttons, the customer's buying cycle." In the future, French says, salespeople will use information gleaned from a prospect's Web site visits to help differentiate their products or services. In short, that means less cold-calling, less pavement-pounding and more high-impact, face-to-face contact.

Companies that lead the way in complex commerce understand that while some of the foundation elements-configuration, consultation and integration-are emerging, we're still centuries away from building pyramids.

"We're quick to evaluate new technologies and to try to figure out how they fit our Internet strategy," says Dixon at Sprint PCS. "It's important to acknowledge, however, that there really is no perfect site. We are not even out of the womb yet when it comes to the Web," he says. "But it's a good time in the Web's evolution to be addressing these issues. It gives you an opportunity to influence the early majority."

Additional Resources
Executive Guides
Whitepapers
Zones
Zone logoZones provide focussed content from CIO and leading technology partners.
Newsletter Subscription
Sign up for our CIO newsletters!
RSS Feeds
Featured Whitepaper Sponsors
Market Place
 

Smart SOA World Tour

Discover how SOA can create smarter outcomes for your business.

Attend and learn:

  • How SOA is helping leading companies to become more agile
  • Where you should be applying SOA processes in your company
  • The top SOA implementation mistakes to avoid

Click here for more information.
  • +

    CIO Live Podcast #79: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires Part II 05 October, 2007 06:00:00

    For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders.
  • +

    CIO Live Podcast #78: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires 28 September, 2007 17:34:25

    For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders.
  • +

    CIO Live Podcast #77: Panasonic Speeds Up Trans-Pacific File Transfers, Part III 21 September, 2007 07:00:00

    Part three in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance.
  • +

    CIO Live Podcast #76: Panasonic Speeds Up Trans-Pacific File Transfers, Part II 14 September, 2007 07:00:00

    Part two in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance.
  • +

    CIO Live Podcast #75: Panasonic Speeds Up Trans-Pacific File Transfers, Part I 07 September, 2007 07:00:05

    Part one in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance.
  • +

    TJX Maxx hacker banged up for 30 years 09 January, 2009 11:26:00

    Key figure in the infamous TJX Maxx Wi-Fi hack of 2005 has been sentenced to 30-years in prison by a Turkish court.
    Maksym Yastremskiy, the Ukrainian accused of being a key figure in the infamous TJX Maxx Wi-Fi hack of 2005, has been sentenced to 30-years in prison by a Turkish court.
  • +

    Data breaches rose sharply in 2008, says study 08 January, 2009 08:27:00

    More than 35 million data records were breached in 2008, according to the Identity Theft Resource Center.
    More than 35 million data records were breached in 2008 in the U.S., a figure that underscores continuing difficulties in securing information, according to the Identity Theft Resource Center (ITRC).
  • +

    Rogue SSL certificate exploit puts VeriSign on the spot 07 January, 2009 11:04:00

    Wishes "white hat" researchers had notified VeriSign before public demo.
    Following the success of researchers last week in creating a false SSL certificate based on VeriSign's RapidSSL brand, the company is scrambling to explain how it happened, how it's preventing it from reoccurring, and whether its other SSL certificate-generation services are at risk.
  • +

    With Gaza conflict, cyberattacks come too 05 January, 2009 08:03:00

    Pro-Palestinian hackers have defaced thousands of sites following attacks in Gaza.
    The conflict raging in Gaza between Israel and Palestine has spilled over to the Internet.
  • +

    5 ways to secure your Blackberry 18 December, 2008 12:58:00

    What do Tom Cruise and the McCain campaign have in common? They have both been bitten by the loss of a Blackberry. Mobile expert Dan Hoffman gives advice on how to keep your cherished mobile device safe, even if it's out of your hands
    What do Tom Cruise and the McCain campaign have in common? They have both been bitten by the loss of a Blackberry. Mobile expert Dan Hoffman gives advice on how to keep your cherished mobile device safe, even if it's out of your hands.
CIO Webcast Innovation #8 - What are the biggest roadblocks to IT's involvement in innovation at your company?
Watch the latest latest edition of CIO Innovation which is now available for download.
Watch the webcast
Sign up to the CIO Innovation update email


CIO Live Podcast #79: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires Part II
Listen to the latest edition of CIO Live which is now available for download.
Listen to the podcast
Sign up to the CIO Live email
Whitepaper

How to Beef Up Your Sales Pipeline

Our economy may be heading towards a recession. Sales rates are dropping. Promotional campaigns are proving less effective than you would like. So how do you continue to grow your business and bring home the sales in such an environment? Download this white paper now to find the answers.