MISC> Internet Commerce Developments in 1998
Gleason Sackman
Date: Mon, 08 Dec 1997 11:05:13 -0800
From: Adam Sherk <ad...@newsbureau.com>
CONTACT:
John Audette, President
Multimedia Marketing Group
541-330-1527
mailto:j...@mmgco.com
http://www.mmgco.com
Internet Commerce Developments in 1998: Pithy Predictions
Bend, OR -- December 8, 1997 (INB) -- John Audette has decided
to go out on a limb and make some "pithy predictions" for Internet
commerce developments in 1998.
Audette moderates the popular Internet-Sales Discussion List
<http://www.mmgco.com/isales.html>, with 8,500+ subscribers in 65
countries. "I-Salers" discuss online sales and marketing, with posts
compiled into a daily digest.
He is also the founder of Multimedia Marketing Group
<http://www.mmgco.com>, the oldest agency specializing exclusively
in Internet advertising, promotions and public relations.
Audette is a featured speaker at Internet World in New York this
month, and is available for interviews. Contact mailto:j...@mmgco.com
**************
Internet Commerce Developments in 1998:
Pithy Predictions from John Audette
(first published in the I-Sales Digest, 12/3/97)
(1) Tilting Playing Field: Advantage Big Dogs
The level playing field that was present in the early days of the
Internet will continue to tilt. Barriers to entry are rising and
it's going to be tougher for the little dogs to compete with the
Big Dogs. Some of the issues that make it tougher for the little
dog to compete include:
(a) Bigger pipes.
As bandwidth increases, so does the ability to deliver
glitzier content, including audio, graphics and even video.
The Web will become more of a true multimedia environment.
Home built or low budget Web sites will look as crude as
local community cable access television productions.
(b) NetStratification
This is a pet theory of mine. The Internet will start to
stratify and the "PremiumNet" will screen out pornography
and spam. It will cost more to access and it will cost more
to provide content. The Internet as we know it now will
become the low rent district and will dominated by the
pornographers, get-rich-quickers, spammers and, alas,
small businesses that cannot afford the PremiumNet.
(c) Location
As exemplified by the channels on IE40, what will determine
good location for a Web site will be how close it is
located to the browser, or better yet, how close it is
located to the operating system. Only Big Dogs will be able
to afford this kind of real estate.
(2) Small Businesses Will Thrive in Niches
The Big Dogs may be virtually impossible to compete with in broad
market areas, but the small dogs will thrive in niches that are
too small to be viable to the Big Dogs, niches that require high
touch, and niches that are created through sheer innovation.
(3) Targeted, Opt-in E-Mailing Will Grow
Opt-in e-mail lists will continue to grow as folks get more clever
at collecting addresses, and as stricter measures are put into
place to block spam.
(4) E-Pub Advertising Will Explode
Advertising on e-mail publications (e-pubs), such as e-mail
newsletters and e-mail discussion lists will grow greatly. Our
studies are showing that response quantity is low, but that
response quality is very high, making e-pub advertising perfect
for those with high-price or high-margin products or services.
(5) Increasing Commodization: Razor-Thin Margins
For years now there has been a strong trend of commodization in
retail, as witnessed by the Big Boxes, such as Price/Costco,
Walmart, et al. Buyers seem to be interested only in price and
availability and smaller retailers are finding it increasingly
difficult to add enough value in order to justify higher prices.
The Internet will accelerate this trend, as it is becoming
increasingly easy to comparison shop online. Retailers positioned
at the convergence of these two trends, such as Amazon.com and
Cyberian Outpost, will find it increasingly easy to do large
volume -- and increasingly difficult to produce a profit on the
resulting razor thin margins. Efficient distribution will continue
to be more important than effective marketing.
(6) Online Malls Will Die
Online malls are a classic illustration of a failed metaphor. It's
an effort to adapt something from one world to another and it just
doesn't translate. There's no shortage of parking on the Internet;
there's no strolling down the hallways to see other people;
there's no need to aggregate storefronts -- in the non-linear
space of the Internet everything is already located right next to
everything else. Internet malls are sold, not bought, and only the
mall operators are making any money.