As we all know, the list of online-only retailers that has wound up on the Internet scrap heap is too long to mention, yet the idea of selling consumer products to people via the Internet has not suffered. Indeed, more people are buying online every day. Air travel, consumer electronics and apparel are three of the hottest categories of consumer products sold online, according to IDC research.  But how did these categories succeed and are there still opportunities for success?  Online is an optimal place for big-ticket items because people are willing to spend some time researching and shopping for such items.  For instance, consumers prefer spending time researching travel options than driving to a travel agency.  That is one reason why online air travel purchases have survived the terrorism threat and continue to grow at a fast pace with about 12 to 15 percent of travel purchases in 2002 in the United States being booked online. Travel also is well suited to online retailing because it is a service -- the buyer does not have to try anything on.  Books, music and videos are a hot category because they were the first products to sell in mass quantities online and they still represent the lion's share of consumer goods sold through the Internet. But other categories are catching up, as witnessed by some recent moves by Amazon.com, in an effort to branch out. While Amazon experienced growth in their traditional sales categories (books, music, DVD/video, electronics, tools and kitchen accessories), the fastest-growing category was apparel and accessories. Amazon.com has done a much better job of partnering with brick-and-mortar players like Target and Toys 'R' Us.  Some experts strongly support the theory that online salability depends on whether a product is bought with qualitative or quantitative factors in mind. Televisions and stereos are qualitative products that customers want to test in person before buying; on the other hand, quantitative products like MP3 players, home networking kits and cell phones sell well on the Web. Wal-Mart has also has recognized that services are a profitable area to be in and recently launched an online DVD rental subscription service whereby buyers pay $18.86 for unlimited rental time of a DVD that is delivered straight to their door. Walmart.com also hawks cruises and rental cars and operates its own Internet service provider. So, are there products that will never sell well online?  Pet food and products have been a disaster, as have groceries. 

Many enterprise software industry observers view supply chain management as the next hot thing and see a vendor race brewing because the supply chain software market last year outpaced the CRM market by 8% according to a Gartner report.      Unless a company has a highly specialized manufacturing process or an extensive supplier network, many experts tend to see supply chain technology as just another item in a growing list of modules to be considered for purchase from their enterprise resource planning software vendors.   For some, automating the supply chain is just another way to work with partners and run an efficient business. Supply chain tends to be a more useful paradigm when talking about manufacturing and less useful in insurance or financial services or any industry where the product is a contract or a set of paper deliverables. 

Wireless technology is gaining ground with consumers but has been slowed in its infiltration in enterprise environments by cost and uncertainty about value.  A new report by the Yankee Group forecasts an increase for corporate wireless e-mail and believes that mobile productivity is an undeniable trend, supported by an expanding range of devices, such as Tablet PCs, and coalescing wireless transmission standards. The ability to collaborate from anywhere is essential to enterprises striving for real-time efficiency and e-mail remains a vital collaboration application. Most experts agree that it is difficult to prove an ROI case with wireless e-mail when you compare the cost of equipment and training and network speed. 

Gateway has announced plans to lay off 1,900 workers and close 80 of its retail stores in order to reduce costs.  Also, Gateway stated that it could reduce costs by another $200 million through targeted savings in warranties and computer parts. It is hoped these moves will help Gateway return to positive cash flow by year's end.  The goal is to transform their business from a PC company to a complete technology integrator and to differentiate the company in the marketplace. After the store closings, the remaining stores will be reconfigured to shift attention to digital electronics and high-end computers that play digital media; some stores may be moved to new locations.

Streaming media, both audio and video, grew extensively from 2001 to 2002, with a year-to-year increase of 52%, according to a report by AccuStream iMedia Research.  The most active market segment was news and information, followed by music video.  Music videos and other music-related streaming constituted the fastest-growing market segment, showing a year-to-year increase of 85%.  Internet radio, on the other hand, declined about 6%.  Broadband users both at work and at home are driving the streaming media industry. 

Amazon.com says it won't fill the orders of customers who took recently advantage of a pricing error on its U.K. site to buy iPaq handheld computers for less than $12 because its terms of use strictly state that no contract for sale has been formed until customers receive an e-mail stating that their order has shipped, meaning it has no obligation to hand out Hewlett-Packard iPaqs at rock-bottom prices and will merely cancel orders made at the incorrect price.  The unit, which retails in England for about $449 including the value-added tax, appeared on Amazon's U.K. site for $11.45 Wednesday morning and remained on the site through the morning. That was long enough for the word to spread through online forums and by shortly after 11 a.m. the iPaq was listed as the site's No. 1 seller.  In January, Amazon canceled thousands of orders for a high-end cell phone that had appeared to be free because of a technical glitch.

Discount Internet travel company Priceline.com recently bought a stake in Travelweb, the online lodging company owned by a group of major hotels, and said it would replace hotel supplier Hotels.com on its Lowestfare.com Web site. Priceline lets customers bid for airline tickets, hotel rooms and car rentals on its main site, and it has been expanding into retail sales of those products on Lowestfare.com.   Travelweb has been trying to take share from Hotels.com and Expedia, online booking companies that are controlled by USA Interactive. It sells its services to Web sites and expects to open its own booking site in late April. The Travelweb hotel companies move marked-down inventory on the main Priceline site because its bidding policy allows them to accept low prices on a case-by-case basis without publishing prices.

PayPal is the de facto market leader in the person-to-small business payment universe, but that may change.  Since eBay purchased PayPal, the organization has become a revenue unit of the world's most successful dot-com venture and it may have to raise fees or enter the person-to-person payment service arena in order to protect margins and raise revenues. Here is how it works in conjunction with eBay. The auction giant's sellers sign up for a premiere or business account with PayPal, for which they pay 2.9% of the transaction value, plus 30 cents. In contrast, other payment services traditionally have charged buyers rather than sellers -- and thus have gained less momentum among e-shoppers.

It is generally agreed that in the world of Internet navigation Google's search engine has few peers, thanks to its speed and its superior ability to select the links that most closely match the keywords you want. This has resulted in Google.com becoming the fourth-most visited Web site on the Internet, trailing only AOL, Yahoo! and Microsoft's MSN.  Now, Google is expanding its search offerings into key niches, particularly online shopping and news, with highly touted new products Google News and Froogle.  However, experts agree that the search technology that makes Google so special for navigating the Internet is only half of the equation when creating engaging online shopping or news-gathering experiences.

 E-COMMERCE RELATED EVENTS AND INFORMATION

The following are links to upcoming seminars and other events that our readers might have an interest in and/or other information related to e-commerce.  

Philadelphia Business Journal, in conjunction with Atlantic Partners Inc. and West Chester University Business Technology Center, is conducting a quarterly survey of local companies to determine what information technology purchases are being planned for this year. We would also like to determine what IT categories are of primary importance to senior IT managers.   For this to succeed, we need your company to respond. Please ask your top business or technology manager to fill out the survey, which should take less than 5 minutes.   The results of the survey will be published in April. Every three months thereafter, a new survey will be available online, and new results will be posted in the newspaper. Those who participate will receive an analysis from Atlantic Partners of the total aggregated results for the Delaware Valley. http://www.atlanticpartnersinc.com/survey/survey.htm to participate.

There was a time when the technology advances women concerned themselves with were dishwashers and self-cleaning ovens.  Not anymore. Today, women have worked their way to the top of the technology industry with many holding executive-level positions in leading-edge companies.  Find out how our distinguished panelists got to be where they are today.  Join us on Wednesday, March 26, 2003 for a Breakfast Briefing featuring Marlee Myers of Morgan, Lewis & Bockius, LLP as moderator and panelists Joan Hooper (FreeMarkets), Katie Kean (IBM), Robbin Steif (MAYA Design), Chris Gabriel (CMU) and Joy Evans (Deloitte & Touche) for a discussion on the challenges facing women in technology and what can be done to overcome these obstacles to succeed.

Time: 7:30 a.m. - 9:15 a.m.
Location: Pittsburgh Marriott City Center
Cost: $30 for members, $75 for non-members
Registration:  via the web, by e-mailing sdurham@pghtech.org , or by calling 412-918-4229