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Complex Commerce

Complex Commerce

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."

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