E-commerce

IBM are sufficiently serious about the future of e-commerce to have invested millions of dollars in research and development leading their e-commerce solution which was recently launched in the style of a major Rock Concert tour of Europe named the "Blue Magic Tour". Chris Chaplow visited the Madrid leg to find out more.

The industry analysists are consistently producing figures which state that the quantity of electronic commerce which is going to take place on the Internet over the next few years is going to rise exponentially. Whilst the numbers may vary slightly. I totally agree.

E-commerce is about making the actual transaction and payment electronically on the internet.

Conservative statistics state that we can expect to see a doubling of e-commerce over the next few years that means by 2003 the quantity will be 16 times that of today.

There appear to be three steps to the e-commerce heaven. Step one - get your information on the web, step two - Integrate the web with your business systems, step three – transform the way you conduct business.

Many readers with businesses are already at step one, they already have websites which are in effect electronic brochures. The websites are used as a marketing tool. In most cases the actual sale of the goods or services doesn’t take place in cyberspace but in the real world. Hostal Anon in Jimena for instance will confirm a reservation on the internet but the actual room is paid for when the guest checks out. David Marshall the local sculptor has part of his catalogue on the net, but sales are still made from his workshop in Benahavis or through his network of distributors world-wide.

The problem for businesses to make step two is the security chasm that lies in front of it.

Many consumers are still nervous of entering their credit card numbers into a web page. This is in spite of the real risk being less than conventional credit card use or misuse. A male friend of mine and female colleague recently had lunch together in Puerto Banús. They split the bill and both paid on their respective credit cards. Some weeks later he received his monthly card statement and noticed all sorts of unknown spending much of it from female designer cloths shops. He immediately contacted the bank. The colleagues discovered they had both been using each others credit card for several weeks. Perhaps security is better left to computers rather than shop assistants after all.

Back to business

For small business security is not really a problem now. They can easily mount a small e-commerce site and sell its products over the internet. ‘shopping trolley’ programmes are relatively easy to set up. The fulfilment of the orders will probably be done in a manual experimental and inefficient way. As the number of orders increase this fulfilment process becomes a problem. Keeping control of stock, printing delivery notes, dealing with customer enquiries about current delivery status.

IBM and other solution providers know that as the number of business’s conducting e-commerce increases so will the demand for complete solutions to the fulfilment problem.

Large companies have generally just run pilot project to date, the Corte Ingles is an example. Large manufactures have some tough policy decisions to make. After having spent years to assemble complex sales infrastructures – importers, distributors, local agents. Should they now begin to dissemble them in favour of e-commerce solutions and direct customer contact.

Security has been a issue though for large merchandisers also. (Not for the consumer as I repeatedly maintain). Adequate security are standards and legal frameworks are only now coming into place. Only the better e-commerce systems are sufficiently robust to withstand the concerted attack from hackers and a new breed of electronic ‘mafia’.  A small e-commerce internet venture like the Andalucia.com book shop would notice such an attack straight away, but a big business would not – until it was too late and hundreds of units had been shipped.

The third step is almost science fiction

The real incentive for business it yet to mature but the potential is enormous. From the big brother point of view it is frightening. Your spending profile will be recorded, analysed and used against you. Imagine if a supermarket could lay out the store with just the items that you are likely to want, (keeping all the others in the background). Even worse presenting you with the latest offers at prices you just can’t resist You will just have to spend more.

Anybody know a good psychologist to help me with my shopping in the next millennium.­