The era of the digital butterflies
NBC News summed up the day's trading on 8 September
1998 with share price rises of 7% for Citycorp, the banking
giant and 50% for Amazon, the best-known on-line bookseller.
At the end of April 1999, the current state of Internet
caused the NASDAQ to waver. The share prices of e-businesses
have become Wall Street classics.
This Wall Street fever is difficult to understand unless
you have the means to evaluate the development potential
of ebusiness. (see Online sales development ).In my personal experience, and following
an analysis of early successes and failures, I am convinced
that a business which understands and applies the rules
of this new economy correctly can expect to multiply its
turnover tenfold every two or three years.
The normal means of access to this economy consists of
creating a commercial website. Those readers who are unfamiliar
with the world of on-line selling should read annexe 1,
the text of a training video which I filmed in collaboration
with Computer Channel. It offers a sound introduction
as to how to set up a commercial website.
But beware : setting up a website is not the be-all
and end-all of your on-line selling strategy. If you wish
to expand, it isn't that simple. Your business must develop
its intelligence as well as its agility.
Intelligence for the products which will be able
to adapt to the client's needs. Commercial Intelligence
for spotting opportunities and consequently adapting your
sales techniques. Economic intelligence, to stay abreast
with the rapidly evolving world of the Web and construct
a vision of the future.
Human agility : the electronic company increasingly
uses software agents and sub-contracting to improve its
efficiency. Financial agility : the ability to access
capital quickly is a key factor of success. Commercial
agility : understanding the new process of adding value
and investing in your chosen market are essential.
Agility + Intelligence = Agiligence ; this is the
equation of your success in the Internet economy.
Volume, volume, volume, margin, margin, margin, logistics,
logistics, logistics : these are the headings of the
first three parts of a study by the Ice group, an American
company specialising in e-business. This report analyses
the results of Amazon.com. In studying the quarterly accounts,
it became clear to these analysts that Amazon could only
pass its break-even point on condition that its sales
exceeded a certain figure (a billion dollars), which could
be achieved in the first quarter of the year 2000. The
extremely limited profit margins were also a subject of
great interest. Two strategies seemed possible to improve
their existing deficit : an increase in annual turnover
per customer, by cross-selling techniques, and an increase
in productivity by improving its logistics, the cornerstone
of on-line selling. Jimmy Wright, the high priest of Wall-Mart's
logistics, was decommissioned. Managers and innovators
work together in the world of e-business.
Following the explosion of online sales of travel products,
6% of American travel agents went out of business in 1997.
Electronic commerce creates victims in the real world.
Electronic commerce was cited on the cover of Business
Week on 24 August 1998 as one of the three main economic
tendencies of the 21st century. This otherwise excellent
magazine was wrong : electronic commerce has already made
its mark on 20th-century economy. It began with Minitel,
continued with AOL, and now Mrs Smith can mount her cyber-trolley
and go shopping. Internet no longer concerns only computers
: it is used for mobile phones, cars, television and interactive
The revolution started a long time
ago, and you must be part of that revolution.