Patience Is An E-Commerce Virtue

Okay, the ornaments are put away, the champagne inventories are depleted, and it’s time to get on with it. E-commerce, hung over from a rough year-end, must pick itself up and move forward. But how?

Can we get it right this time, brothers and sisters? Can we generate some profits, some goodwill and some trust in the online shopping process?

Although a couple of industry insiders whom I trust have gently told me I’m overly optimistic, I see blue skies for e-commerce. Blue skies preceded by a few clouds and some heavy storms, to be sure, but ultimately blue skies.

But first, ambitious e-tailers and those holding the purse strings must learn a few lessons about skillful planning, the art of business development, and oh, yes…patience.

The Big Picture

No, I did not sleep through events surrounding such dot-com dropouts as Pets.com, Toysmart.com, MotherNature.com and Garden.com. And yes, I can see the stock market has been a bit under the weather, Wednesday’s gains aside.

But it’s important to think long term, and consider the big picture. For example, since 1945, there has almost never been a year in this country when the stock market has not rebounded — often significantly — after a down year.

Unfortunately, the technology age has fostered a few counterproductive characteristics among its participants. We’re highly impatient, not prone to thinking past the current year and fairly addicted to instant gratification. But industry does not cater to such whims.

Growing a Business

Before real progress can be made, e-tailers must learn that they have a double burden to bear. First, they must develop business models that can go the distance. Most have not done so, instead opting for splashy debuts and high-profile, accelerated growth that too often causes the business to simply implode.

Second, every e-tailer must participate in the growth of the e-commerce industry as a whole. Isolationism isn’t getting us anywhere. Even the most financially successful e-tailer must do something to encourage widespread online consumerism. That means aggressive pursuit of online alliances, co-marketing agreements and progressive partnerships.

Amazon.com and Toys ‘R’ Us are already the electronic poster children in this regard. Lo and behold, this dynamic duo emerged as the holiday season’s clear victors in terms of consumer attention and overall sales, attracting 123 million shoppers, according to Nielsen//NetRatings.

Target Marketing

Additionally, if the e-tail establishment is missing one sure bet, it has to do with mass marketing without respect to individual or even geographical differences among its constituency.

Consider: New research from the Pew Internet Project reveals that online shoppers who live in the Northeastern United States used their credit cards at almost twice the rate of those living in the Midwest this holiday season. Midwesterners, on the other hand, more often used the Internet to research holiday traditions.

Simple logic should tell online merchants to continue their aggressive mass marketing to Northeasterners, while Midwesterners need some hand-holding and must be “carefully taught.”

As for Southerners, we seem to especially like personalization. Amazon.com, for example, would do well to include a Mardi Gras icon on its home page this spring, with clear instructions: “New Orleans: Click Here.” A million locals and another million visitors during Carnival will thank them with dollars and great word-of-mouth.

Slow and Steady Growth

Like anything else worth doing, online business development and target marketing takes time. Slow and steady wins the race, even when users are surfing at increasingly high speeds.

The great retail institutions in this country did not materialize in six months. The goals put forth in their business plans were often measured in years, rather than the weeks or months of idealistic dot-coms.

That simple observation needs to reach the ears of those who are underwriting new dot-coms as well. E-tailers who discover that their underwriters require a quick fix, fast profits and a lightning strike in the e-tail arena would do well to seek alternative capital.

If It Ain’t Broke…

Meanwhile, the mad, fast and furious search for a sustainable model may be missing the forest for the trees.

Guess who emerged victorious over the holidays? Walmart.com, Target.com, Sears.com, BlueLight.com, JCPenney.com and Hallmark.com. Sound familiar? They should. They are brick-and-mortar operations that carefully diversified into the parallel universe of online merchandising, using models that have served them well for more than a century.

The message is for e-tailers is clear: slow down, do your homework and spend wisely. Associate yourself with winners and share the costs of capturing the attention of American consumers.

And to the investors who thought the Internet was a pot of instant gold: You’re smarter than that. Be realistic, and exercise some patience.

What do you think? Let’s talk about it.