Archive for ecommerce

Internet strategies for SME’s

Posted in General with tags , , , , , , , , on June 20, 2010 by newideasconsult

Very often, and especially on LinkedIn.com I read about people and companies wanting to start their own online business, and most often they ask for a recommended ‘shopping cart’ or ‘e-store’ software to build their venture on.  Most often too, when you respond to them and ask them for more information regarding what they wish to do, it becomes clear that they wanted to start the plan by securing a good platform, a e-commerce system on which to build their business.

That sounds perfectly logical and for many mom-and -pop type business ideas, the cookie-cutter approach works.  Much like SAP can sort out processes within a company that implements it because it enforces certain rules on them required for it to work correctly, these e-commerce systems will force people to think through what it is they need before being able to launch their business.  Without certain key features being addressed within such a system, the site won’t go into production or won’t work correctly when you try to take it into production.  So for the majority of small ideas for an e-store type business these products will work very well, and I often recommend my favorites to some of these questioning parties.

However, starting with selecting an e-commerce platform when you’ve got an Internet idea, is possibly the worst decision you can make.  We used to say that on the Internet everything and anything is possible, but we try and box them all in similar ‘open source’ or ‘commercial’ e-c0mmerce platforms these days.  Imagine if we accepted that art could only be done on a canvas – we would have some wonderful pieces of art to this day, but we would not have a ‘Sistine Chapel’ or Michelangelo’s ‘David’ or Villa of the Mysteries.

If as an SME you are planning to go on the Internet and launch your e-business there, try and think expansively and plan like the corporates and brands do.  Work out what it is you want to do, what you want to sell to your customers, and how you want them to experience this.  Put together a business plan and a strategy to achieve it online.  You cover the basics, for example, you would need to be ‘connected’ to the Internet to enable your business, you would need to have a payment system or bank connected to enable you to do paid for services or product sales, and you will need a fulfilment service and a customer service, and so on.  But the way you plan your online presence, its shape, its function, its look, and its exposure, all contribute to the customer experience of your idea, your plan, your business.

Once you have these all down on a document, no matter how rudementary, sit down with someone, friend or family or local consultant who are Internet savvy, to work through it with you to grow your idea into a mature model  before looking for an e-commerce system to enable your business.  Only after such an exercise would recommendations for e-commerce systems make any sense to you or have any value for your business.  Planning your e-commerce venture this way enables you to better choose an open source e-commerce platform, a commercial e-commerce platform or a design agency to provide the vehicle on which to launch it.  At the same time you are better equipped to answer the questions the bank or payment processor will ask of you before awarding you an account against which to accept card, e-wallet, and/or ACH payments.

There are more details to the above, but this post is about getting people to sit down and plan their idea out before jumping on the most popular e-commerce platform and trying to force your idea to work through it.

One business strategy, not two

Posted in General with tags , , , , , , on May 11, 2010 by newideasconsult

Over the years I have heard many companies speak of their e-commerce or ‘internet’ strategy as if it is some secret or hidden agenda that has covert operators hacking around in the dark trying to ‘hit’ on the magic SEO numbers that will realize the company huge numbers of online visitors with the accompanying bonus for the coverts of course. I am 100% behind a planned attack when approaching e-commerce or when considering launching an Internet presence as a business, don’t get me wrong.
What bothers me is that the starting point is often so wrong, with the board or management within a company spending their time considering ‘real world’ issues whilst the ‘other’ team focuses on developing some sort of e-commerce strategy often even as a secondary department or company to the main. It bothers me because so many companies in fact should start with one strategy for the whole, one plan to reach their market, grow it and retain its loyalty. We should be encouraging business to talk about their business strategy first and foremost (see my post for SME’s here on a similar topic).
My mantra since Netscape days has been to make company execs understand that there is only room in their budget and planning for one strategy, the core one, the reason why they do business, the core value their customers love, and so on and so on. One strategy as your starting point means everyone, from the tech savviest to the semi retired within such a company, will know exactly what needs to be achieved in terms of their business. One strategy determines how the Internet and mobile channels will be tackled, and what those two channels will be required to deliver to enhance the company’s bottom line and justify their existence.
Too often we react, doing what we think or know our competitors may be doing, and in so doing we dilute our value proposition to the customers and to our shareholders. We invest in serious technology because we are told to or because our IT team has recommended it, regardless the value to our core strategy as a business. As a consultant I try to help and inform my clients for example to consider the line ‘technology should be an enabler to THE goal’ when too often it becomes the goal. An exercise to me that seems to always work is for a management team to re-evaluate their strategies and decisions against the original core strategy that brought their company to where it is. Like Nokia and Berkshire Hathaway have proven, change is good too, if it is a total change.

However this post is not about core strategy re-evaluation, but rather about aligning our e-commerce or internet or mobile strategy to our core plan and to keep reminding ourselves to check how far they have drifted from the middle. Of course right there we have some excellent pointers to discuss in another post – the reasons for such a drift may not always be negative. However, most companies, I generalize here as it is the vast majority in my view that should consider this, should have a single strategy for their business, and they need to study carefully the benefits of implementing any x-commerce project against that strategy before making the call.

One strategy takes everyone within the company along for the x-commerce ride, if it fits, and one strategy creates a framework of achievements such an implementation must reach for to be deemed successful. One strategy also very quickly shows when any x-commerce implementation would not fit, and in doing so a decision can be made quicker and often at a much lesser opportunity cost than usual, as to whether such a venture should be created as a separate department or company apart from the main. When that is done, the creation of a new x-commerce unit will be based on solid business principles that can contribute worth to its parent instead of bleeding out the budget each year.

Payments future landscape

Posted in General, Innovation, technology with tags , , , , , , , , , , , , , on April 25, 2010 by newideasconsult

These past few months have been rather interesting in terms of the payments industry and the subtle shift in consumer perceptions.  One of the most amusing to me has been the clear lead Paypal has in the e-venture payment space to any other brand, card associations included.  This may not be a good thing in my opinion, but undoubtably it has happened.  Ask any e-venture owner what payment method they will be accepting on their platform or site, and at least 7 out of 10 will tell you Paypal.  Not Visa or Mastercard, but Paypal, regardless the obvious issues around its regulation and the bad risk prevention policies it employs.

This to me indicates a real challenge traditional payment companies may face during the next few years, which is how they can win back the market from ‘upstarts’ such as Paypal, Moneybookers, mobile networks, and the many alternative payment methods in the market today.  With the strength of the Paypal brand on the Internet, and to me this means their brand strength in terms of the Internet savvy generations, as well as the rapidly growing mobile payment services, what will the PCI (payment card industry) founding members (Visa, Mastercard, Amex, Diners and JCB) do to retain their brand strength or for some regain their brand strength?  Seems to me that as one accepts virtual payment instruments and mobile phone based solutions as the way forward, it removes or distances the payment methods used from a card, the base tool used in the credit card growth the past 4 decades.  Once NFP, mobile payments, and the next generation of Paypal type solutions have rolled out, the card brand will be completely hidden, and in my view, forgotten in the not-so-distant future.

Still some way to go before we can say goodbye to the plastic card (magstripe and chip), but it seems to me the subtle shift in market direction may just ring in that future much sooner than many may have thought.  Unlike the media industry’s late wake-up to the power of virtual distribution, the card payment industry may just have enough time to learn the new rules of the payments game, and hopefully apply them wisely to retain their future market share and brand strength.  Some may not be able to transition, as the departure from card may be too big a shift in paradigm for them, but those that do would have their years of payments experience married to new tech solutions that could eat the Paypals of the future for breakfast.