As you may know if you read issue 97:12:01 ("New ISO Paradigm") some big names are investing some big money in Internet Commerce. If you still need some proof that this is a profitable venture that will only get bigger, here goes:
IBM (Big Blue itself) has launched the Institute of Advanced Commerce and will assign more than 50 researchers to the new research institute focusing on electronic commerce. IBM has invested $10 million in the project.
The institute will bring together scholars, researchers, and executives from corporations and universities. They will work on projects to explore ways to spur acceptance of electronic checks, electronic coupons, on-line promotions, and auctioning. "Over the short term, some projects are very likely to lead to IBM products," said Stuart Feldman, director of the new institute. "But long term, we'll be looking to provide headlights on where this world [Internet Commerce] is going." He continued to state that today the Internet only performs a slice of what people will eventually demand.
Internet shopping and advertising is growing by leaps and bounds, according to recent studies.
Jupiter Communications has released a study which finds that on-line sales made up 44 percent of the $2.6 billion purchases of the 1997 holiday season. Additionally, Forrester Research predicted that the on-line industry would bring in $750 million to $1 billion in the fourth quarter of 1997. While a year ago consumers where concerned about security, now 10 million of the 40 million surfers are purchasing items.
According to on-line analyst Kate Delhagen, "Last year was infancy. This year I'd say we're toddling. Merchants have said we're running at our pace or above. That's pretty big news for the Internet. In the scheme of things it's just a tiny blip on the radar. But it's still a billion dollars."
According to Morgan Stanley, in a mere eight years Internet sales could surpass the $370M mark of catalog sales. Richard Thalheimer, founder and chairman of Sharper Image Corp., said his Internet sales reached $3 million for 1997, roughly five percent of the company's $60 million in annual paper catalog sales. He expects that number to jump to $6 million in 1998. "Some people don't think Internet shopping will be anything, I however think they won't use paper catalogs five to ten years from now."
Additionally, Internet advertising was predicted to grow to 1 billion by the end of 1997, more than triple the $267 million in 1996. It will soon surpass billboard advertising, which brought in 1.3 billion in 1996. "As you look at who has become advertisers, one after another of the mass-market advertisers are joining the medium," said Myer Berlow, vice president of interactive marketing at AOL.
Not So Fast
But, there are still hurdles to get over. For example, when consumers go on-line to purchase something, they know what they want and they go to the correct site to purchase it. According to Nicole Vanderbilt, e-commerce director for Jupiter Communications, "While a lot of on-line merchants have done well to serve a consumer that has one decided item in mind, what they haven't been able to do is capture the traditional shopping behavior: browsing, shopping for goods, impulse buys."
Also, in order for the Internet to keep up with print and broadcast advertising, it must meet established standards. "The more we say that Internet advertising is new and different, the less traditional advertisers take the medium seriously," said Rich LeFurgy chairman of the Internet Advertising Bureau.
All the figures indicate that e-commerce is booming and there is considerable profit to be made through Internet sales and advertising. As with any new medium, the ones who profit are the calculated risk-takers who get in on the ground floor.
So, if you don't have $10 million to invest like IBM, you can still cash in by investing some time in learning the commerceWAVE product and in providing your merchants Web-based capabilities before someone else does. For information on how to pitch the Web to new or perspective customers, call The Green Sheet at (800) 757-4441 or contact commerceWAVE at 760-931-0070 or ChecksByNet at http://www.checksbynet.com for a tour of how the world's first Web-based check product can help your customers do more business in a secure environment on-line.
