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I've written numerous articles and taught many classes about the benefits of virtual retailing on the Internet and I always ask my students or readers to imagine themselves frantically rushing to stave off incursions by virtual retailers who don't have the overhead of traditional bricks-and-mortar retailers during the prime Christmas gift-giving season.
Electronic commerce has become a critical part of today's business strategy according to surveys covering a wide range of industries and company sizes. A significant number of companies who did not conduct e-commerce on the Internet just a few years ago now plan to have some e-commerce sales activity during this 2004 holiday shopping season.
Typically, e-commerce falls under the banner of marketing and within the Marketing/Sales Department budget. The following are the responses to e-commerce surveys on some of the issues that need to be considered.

1. Channel conflict -- The companies surveyed were split on whether channel conflict is a big issue with one-third saying yes, one-third saying no, and one-third staying neutral.
2. Security -- Security is a major concern of the respondents who believe technology needs the most improvement.
3. ROI -- Of those with e-commerce operations, 26 percent had already achieved a positive ROI, and 54 percent expect to achieve it this year.
4. Investment -- The average investment to date on Internet commerce (software, hardware, consulting services) is $199,000. Software and hardware account for more than half of the investment. Don't be put off by that figure if it seems out of your reach because you probably have already made an investment in hardware and software that can be "tweaked" with a modest additional investment.
5. EDI -- Most respondents use EDI for purchasing and selling but within three years, EDI will not be the primary way of conducting business with suppliers. Most (63 percent) will extend it to the Internet.
6. E-mail and fax confirmations -- While online order entry is the predominant tool used for orders, e-mail and faxes will remain major tools for order
confirmation.
7. Internet payments -- One-half of those surveyed are already accepting Internet payment and another 25 percent will do so by sometime in 2005. Credit cards are the primary instruments, although use of debit cards and electronic cash and checks is growing.
8. Links to other sites -- the most effective techniques to attract customers to a Web site are links to other sites, non-Internet advertising, and techniques that ensure pickup by search engines.

My first foray into e-commerce occurred about eight years ago when Chef's Catalog launched a site that was basically full of catalog pages. Shortly thereafter, we began taking orders and payments over the Web. We generated incremental sales increases since we were reaching a second layer of the market that we were unable to capture through the traditional advertising methods used by mail-order catalog retailers.
At that time, we made the strategic decision to spend more of our advertising budget on Web advertising, and to align the catalog with vendors who had good reputations and strong brands. We worked closely with vendors on co-branding and cross promotions, and we worked especially hard to become the master of electronic delivery. The Internet enabled Chef's Catalog to partner with ground and air delivery companies to provide our customers with the fastest service that was humanly possible.
Understanding the importance of every link in the chain of delivery from a clear and concise product presentation via text and photos to competitive pricing, to efficient internal operations to make sure the pick, pack, and shipping areas are as carefully attended to as the marketing of the products online and in the catalog, and using a delivery service that does not become overloaded during the peak holiday shopping times is critical to maximizing both your top and bottom lines.

Evaluating Your
Current Presence
How can you create, implement, and assess your online presence? One method I've always valued is reading the books written by the world's top marketers. I've always read everything I could find that was published by Philip Kotler, professor of international marketing at the Kellogg Graduate School of Management at Northwestern University in Evanston, Ill. He has consistently written the best books on marketing that I've discovered. Google him and see what books and articles he's written recently.
I've also admired the insight into the future of Phil Carpenter whose focus is developing the essential strategies for building powerful e-brands. He specializes in the fluid field of Internet marketing and uses case studies as the core of his books. He's conducted extensive interviews with the marketing and executive teams at Yahoo, Barnesandnoble.com, and iVillage. Check out the brick-and-mortar companies that have brought their brands from the physical world to the Web. How did these crossover marketers become successful? How did they become profitable? Google Phil and see what he's written lately.

Inspirational Quotes for World-class Marketing

"If we do not change our direction, we are likely to end up where we are headed." -- Old Chinese proverb

"It is a capital mistake to theorize before one has data." -- Sir Arthur Conan Doyle

"The paradigm has shifted. Products come and go. The unit of value today is the customer relationship." -- Bob Wayland

"We don't have a marketing department; we have a customer department. And we don't have a personnel department; we have a people department." -- Herb Kelleher, CEO of Southwest Airlines

"It is useless to tell a river to stop running; the best thing is to learn how to swim in the direction it is flowing." -- Anonymous

Strategic Directions
In case you're still not convinced of the benefits of having an online presence for your operation, following is a list of strategic drivers (opportunities) for e-commerce. Source: Cahners In-Stat Group
1. Expand universe of potential buyers
2. Increase sales
3. Meet customer expectations
4. Increase brand/product recognition
5. Ease of doing business
6. Competitive pressure
7. Cost effective
8. Provide more information to customers
9. Improve customer service
10. New sales channel

Marshall Marcovitz is president of MM Consulting, a catalog and Internet consulting company that specializes in the retail industry with a focus on marketing communications for retail store, catalog, and Internet organizations. Marshall is also a professor at the University at Chicago where he teaches courses on marketing communications. Contact him at mmmellow9@yahoo.com.