Lower Costs and Greater Delivery Options

Technology will change in the way Web sites are built. Today when you build a site, you guess how many customers you're going to have and how much capacity you'll need to protect against the site going down. Then you spend a whole bunch of money. You may end up spending $1.5 million on a computer without knowing whether it will stay up 24 x 7—and that doesn't include the cost of programming, software, or people. Within the next two or three years, this process will be far more linear. You'll start out with one machine or two machines, and you'll add a bunch of little cheap machines as demand grows. This will give you greater protection and lower cost going in.
Technology will also have an impact in the home. In a few years, homes will be nothing like they are today. In the U.S., people of middle incomes on up will have at least seven places in their home where they can access the Internet: televisions, PCs, cellular phones, and viewing devices we call screen pads. This will change the way we think about advertising. In five or 10 years, all advertising, not just Internet advertising, will be direct-response advertising. You'll have click-through abilities on your television screen, for example. This transformation also will change the way we think about reaching people with the Internet. As the Internet and television merge, it will change the brand-building experience even more.
What About Now?So what to do about e-commerce today?
Customer acquisition on the Internet is a tough challenge for most businesses today. They are spending a lot of money to acquire customers through portal distribution deals, as well as on Internet advertising and on traditional print and television advertising. And people are trying to decide which methods of advertising are the most efficient. At this stage in the game, you either have to be willing to spend a lot of money to establish a brand presence or you've got to have a brand that you are clever about associating with the Internet, which is hard to do.
Right now, most companies are so focused on bringing people to the Internet that they are not considering whether that is really changing some aspect of the buying experience for their customers. And it's not the core question asked by most of the people I talk to, whether they're CEOs, IT people, or marketing people. The core question is not "How do I have a very different experience from everybody else on the Internet or what goods or services do I provide." The core question is really "What is different about that experience other than it is on the Internet?" Are you really going to provide better personalization? Are you going to make it easier to pay or cheaper to pay? Will you provide better customer service on the Internet? Hardly anybody thinks about that.