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Myths & Realities Of E-Commerce

In a GERS presentation called “E-Commerce In A Box,” Mike Strauss, VP/business manager of Panurgy, a leading global IT solution provider, outlined what he called, “myths and realities” of global e-commerce today that are really eye-openers.

“Global e-commerce this year is from $4 billion to $12 billion, a pretty wide range. But a few things are clear. Your business will be changed by the web. It’s just a matter of percent. But you can take that business yourself,” Strauss said.

Brick & mortar retailers have “strong advantages online, with an existing brand, loyal customers and expertise,” he said. However, Strauss outlined myths surrounding e-commerce that brick & mortar retailers should know. They are:

  • It’s Easy: “There are infrastructure and installation issues you must be aware of. You have to drive people to your site and provide a consistent message.”
  • It’s Cheap: “A business-to-consumer site costs $1 million. Most first sites costs $350,000. Top sites costs $2 million, with and others costing 10 times that. Development time is five months. State-of-the-art is outdated quickly due to back-office functions. And the site must be constantly updated.”
  • Everyone’s Doing It!: “There are still relatively few e-commerce sites. Best Buy, Circuit City and Wal-Mart are just getting involved.”
  • It Levels The Playing Field: “The reality is that most e-commerce sites come from large, established companies. The exceptions are eBay and Amazon. To succeed you need a brand name.”
  • It’ll Put Me Out Of Business!: “The reality is that 80% of sites are the business-to-business type with 20% business-to-consumer. E-commerce doesn’t mean that the web will take all of your marketplace. [Research shows] web shoppers are more likely to visit your store than non-web shoppers.”
  • Price Is The Most Important Factor On The Web!: “E-commerce sites do not always offer the lowest price. Consumers still want top brands and service.”