A Glimpse into the Future of E-Commerce

As online shopping suddenly explodes into mainstream culture, millions of Internet users are just beginning to adapt to this new way of purchasing goods and services. However, in light of some exciting innovations in 3-D Virtual Reality online store technology, it seems that consumers will find that the e-commerce malls of the future are starting to more closely resemble their offline brick-and-mortar counterparts.

Until now, online stores largely resembled typical Web pages. An online store is virtually indistinguishable at first glance from, say, a page of an online computer manual, or even an online newspaper article. Essentially, an online store, as we know it, consists of little more than a “flat” Web page with some text, images and a button that activates the shopping cart feature. Not so in the online store of the future developed by Activeworlds.com, Inc. (OTC BB: AWLD), which offers a rich, dynamic environment in which to conduct real-time e-commerce.

Are Shoppers Really Ready for Virtual Reality Shopping?

Rick Noll, president and CEO of Activewords.com told the E-Commerce Times, “Most people think that the VR (Virtual reality) Web is just science fiction, so they’re very much surprised to see that it’s already here.”

In fact, according to Noll, Activeworlds.com, a 3-D virtual reality environment featuring an online shopping mall called @Mart, already has more than 300,000 registered users onboard. Many of these users have built their own 3-D online stores using Activeworld’s drag-and-drop store building technology.

The new virtual reality shopping mall allows online shoppers to peruse these stores in a virtual 3-D environment that closely resembles a modern suburban neighborhood shopping mall.

“This is the way that people expect the Internet of the future to look like. They expect more than just Web pages. They expect a 3-D environment. That’s exactly what we’ve started here,” says Rick Noll.

Shoppers “walk” around the @Mart virtual mall by pointing their mouse or using the arrow keys on their keyboard to proceed. Movement in @Mart is very much like the PC game Doom, in that it offers a first-person perspective of the virtual environment.

Stores are arranged in a familiar configuration, and shoppers can walk into these stores. Merchandise is displayed as typical 2-D Internet graphics that can be found anywhere on the Web. Clicking on those graphics causes a detailed description of the item to be displayed in the shopper’s Web browser, and from there the actual purchase and payment processing takes place on the merchant’s Web site, rather than in the virtual mall. However, according to Activeworld.com’s president and CEO, payment processing will be available at the 3-D store by the end of Q1, 1999.

Benefits of the Virtual Reality Shopping Environment

There are three main advantages to the online mall of the future:

First, the multi-faceted dynamic virtual reality environment allows merchants to implement stronger marketing and branding initiatives than are available in a “flat” Web page.

The second benefit of the 3-D environment is a long shopper retention period. According to Activeworlds, the average user session is a whopping 45 minutes — an abundance of time to market effectively to shoppers. In comparison, the average user session for a typical Web site is less than five minutes. Why the longer user session in Activeworlds? In a word, it’s just fun to be there.

The third benefit of this new technology is the great degree of interactivity that is available between merchant and consumer, as well as among other shoppers and visitors. Activeworld.com’s mall technology enables online merchants to offer features that are sorely lacking in most of today’s e-commerce stores. For example, @Mart makes it easy for store owners to provide real-time customer support, sales assistance, cross-selling, promotion and individualized care that have traditionally proven to drive sales.

The Big Picture

Activeworld.com’s @Mart is truly a step ahead of other e-commerce malls. With a growing number of registered users, the company will have ample opportunity to identify and resolve any remaining technology challenges. The proprietary nature of the Active Worlds ™ technology requires users to download and install special browser plug-in software. However, the installation was particularly smooth when we tested the system and ran without a hitch. Nonetheless, the industry-wide trend has been to move away from plug-ins and towards standard functionality.

Another issue is one of download time. The richly textured virtual reality environment can take some time to download and, therefore, may not be ideal for shoppers with slow internet connections. However, the company is already implementing a streaming data system that should help consumers with slow modem connections to speed up their download time considerably.

The last challenge facing this new e-commerce technology is one of market penetration. Activeworlds.com went public in January, 1999, which should help improve the company’s cashflow, and enable more extensive advertising and marketing initiatives. In our view, if Activeworlds will be able to show e-commerce driven profitability, it will become a particularly attractive target for acquisition by an established community or portal site like GeoCities, Yahoo!, AOL or Netcenter.