Nomads in the desert

August 27, 2001

Summary:

This article provides a critical look at some of the literature being published about e-commerce and managerial implications of such. With a more objective viewpoint as this, it questions how the internet should be viewed and raises some valid questions that must be pondered before considerable expense is untaken. While these thoughts are not specific to one industry, they are still very relevant to the adventure tourism industry.

One report from one research firm gives that firm's opinion on a certain trend, but two reports giving the same opinion validates that opinion. Why, two reports practically make that opinion gospel truth.

This is absolutely true, but the question must be raised how many finding are required until the theory is accepted as truth?

Both of the reports basically say the same thing. Traditional retailers with websites should not calculate the ROI on those websites solely on their online sales. Instead, they should take into account the effect of the website on offline sales, and on "operational efficiencies" and "improved payroll productivity". Forrester have decided to call this companywide ROI or cROI for short.

The research firms seen to be making an effort to mollify all those middle managers who authorized outrageous budgets for fancy ecommerce sites back in the boomtime, when the self-same research firms told them that just about everyone would be buying just about everything on the Internet by 2005.

The idea discussed in this paragraph is extremely important, it is naive to simply take this source as a basis in order to make a decision. Managers must be smarter than this, and look at trends, opinions from more objective sources and evaluate the future implications of this on their industry.

That's the problem, really. It's almost impossible to quantify the effect that a retailer's website has on sales in its online sales. The NPD Group says that 45 percent of consumers have bought a product in a store after researching that product on the store's website. But maybe they would have bought the product in the store anyway. Some of them certainly would have, but how many, nobody knows.

This point is absolutely true, but the same can be said for many of the other advertising messages and techniques used. At the end of the day, with the trend of marketers to establish an integrated marketing communications plan, there is no way to evaluate the true linkage with sales, to differ would be naive.

There is no doubt that if this opinion was taken, the amounts being spent on internet pages would reduce substantially. Obviously this will differ on the types of industry that is involved.

* All text in red indicates quotes taken from the full text article.