[Previous] [Next] - [Index] [Thread Index] - [Previous in Thread] [Next in Thread]

Subject: UKNM: RE: E-commerce fiasco or was it?
From: Paul Durrant
Date: Tue, 24 Feb 1998 12:24:30 GMT

Very interesting but I wouldn't throw in the towel just yet. We may be missing some strong positive messages.

>>What he failed to mention is just how low - the whole high-profile,
expensive project netted around 500 purchasers and (I seem to remember)
250,000 visitors.<< (That's a 0.2% hit rate, many mail shots have fared worse!).

For an experiment I reckon that's pretty good. Does anyone out there know the ratio of viewers to purchasers on good "old" TV shopping? I'll hazard a guess -- not much better than the experiment! (I'm waiting to be proven wrong!) The same question can also be asked of posted mail order catalogs.

I was at a presentation by Barry Diller CEO of QVC about 5 years ago. I can't quite remember the actual figures but it was something along the lines, 5% of U.S. consumer goods spending gets supplied by mail delivery and how this has remained largely static since the mid-1950s. What has happened is the channels used to attract consumers attention for that mail "supply" business have changed. And grabbing a large chunk of that market is what QVC grows on.

In my opinion e-commerce is another order channel for mail delivery. It's dogged by all the old associated problems of not being able to really "handle" the goods first, the hassle of returning goods and the incredible delays and phone calls that often ensue. I firmly believe electronic payment is not the real bottle-neck and when really cracked won't cause that 5% mentioned by Diller to shift much. One exception financial services but even then until secure electronic signature becomes proven and accepted, this will still have a mailed component!

Also there's a cost dimension. Compared to mail order, printing and posting quarterly, thick and heavy catalogs may require a 5% hit rate to breakeven. Doing the same on over the web (and its low cost to update) maybe you can not only live with say a 1% hit rate but make a very good return thank you.

Now 0.2% hit rate on a limited experiment doesn't start sounding bad at all.

I'm waiting for the screams about software and information already happening with no physical component.

Paul Durrant
Tarnlough Ltd.
Business Communication Consultants

[Previous] [Next] - [Index] [Thread Index] - [Next in Thread] [Previous in Thread]