A Perfect Market Comes of Age

The Economist, Survey of E-COMMERCE. A Must read for May 13th 2004

E-commerce is coming of age, says Paul Markillie, but not in the way predicted in the bubble years

I expect I'll add more quotes and comments once I get my dirty little hands on the hard copy......

Updated : Lots of good stuff...

the wild predictions made at the height of the boom -namely, that vast chunks of the world economy would move into cyberspace -are, in one way or another, coming true.

the actual value of transactions currently concluded online is dwarfed by the extraordinary influence the internet is exerting over purchases carried out in the offline world. That influence is becoming an integral part of e-commerce.

A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services?even if the firm does not sell online

consumers are "deconstructing the purchasing process".... They are unbundling product information from the transaction itself

Spending patterns on the internet are also getting closer to those on the high street. For instance, in Britain last year women spent more online than men...Older people, too, are using the internet more to shop.

Amazon's business model is built on five fundamentals which it thinks will not change: low prices; a big selection; availability; convenience; and good information about products.

Amazon employs the Toyota principle - reducing defects and problems in its order process as early as possible. One of Amazon's main quality measurements is contacts per unit ordered. Every time an employee has to intervene in the automatic process, perhaps to redirect something delivered to the wrong address, costs go up. By keeping this measurement as low as possible, Amazon not only reduces its costs but also boosts its customer-satisfaction ratings.

Yet for a general retailer, the transition to the internet is by no means easy.. For a start, inventory systems in hundreds of stores had to be changed so that stock positions could be checked instantly, instead of calculated at the end of the trading day.

Travel makes up the biggest chunk of business-to-consumer e-commerce, accounting for about one-third of online consumer spending.

BY SEVERAL measures, eBay is one of the world's fastest-growing businesses.

Networks are akin to a snowball rolling down a hill, gathering up ever more snow as it gets bigger.

the paid-search business is leading the recovery in advertising expenditure on the internet.

"In 2001 it was unimaginable to think that by 2004 I would not have to leave home any more and, short of needing surgery, could get everything I want from a combination of e-mail and websites," says Marian Salzman, chief strategy officer for Euro RSCG Worldwide, a big advertising agency.

Listen to the interview (8:51)by Paul Markillie, The Economist's Business Correspondent, writing about services (marketing, Advertising etc).
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To see what everyone else is saying..go to technorati