Neiman Marcus names a new chief marketing officer and restructures staff to address the growing importance of e-commerce.
It’s been called the dirty little secret of e-commerce: most web shopping happens during the workday on company time and bandwidth. But guess what: it’s not so secret anymore.
A wave of recent findings is trumpeting rampant workplace web shopping. Here’s a sample: 60% of workers surveyed by Neilsen/NetRatings visited a shopping site from a workplace desktop in January-and that’s not even peak shopping season. In an October survey by career information web site Vault.com, 32% of workers said they access the web at least a few times daily for non-business reasons; another 37% admitted surfing the web constantly. And a total of 70% of those responding to a new BizRate study said they shop online during the workday-with 40% admitting to doing most of their web shopping on weekdays from 8 a.m. to 4 p.m. Need we go on?
Some employers say Internet access for personal errands is fine by them; a perk that keeps workers happy when companies expect them to put in long hours. Until productivity is visibly disrupted on their very own enterprise, they’re not likely to assign a high priority to regulating or limiting workplace access to shopping. So most e-retailers aren’t worrying about it either. “I haven’t heard any members say this is killing their sales.” says Scott Silverman, vice president of Internet retailing at the National Retail Federation.
Fair enough. But though still relatively low on merchants’ radar screens at this point, workplace web surfing rules should be on the radar of every smart e-retailer looking at the future. All projections for online shopping point skyward, well beyond its current 2% penetration into total retail sales. “As more people shop the web and as it becomes a more regular practice for those who already shop online, that 2% is quickly going to become 4%, then 8%,” says Seth Geiger, vice president of professional services at BizRate. “It would not be unrealistic to estimate that by 2006, 10% of retailing would flow through the Internet.” And with much of that increase likely to flow through workplace desktops, employers could get tougher on shopping from work.
The makers of filtering software to manage corporate desktop Internet access-and some analysts that follow that industry-believe that day will come sooner rather than later. IDC estimates that today perhaps 50% of employers either monitor or actively manage employee’s Internet access. But it also projects that the corporate market for filtering software to manage Internet access across the enterprise will skyrocket, zooming from 1999’s $63 million to $590 million by 2004. That number covers software that monitors and manages desktop access to dozens of categories ranging from gaming to adult sites to banking and stock trading. But there’s no denying that among employers already deploying filtering software, shopping is one of the most popular targets. About 60% of the 6,000 corporate clients of SurfControl, a Scotts Valley, Calif.-based filtering software developer, use the technology to mange or limit access to shopping sites, among other web categories.
Employers that either bless or ignore workplace web shopping don’t regard it as a productivity threat. They may even see it as a benefit, reasoning that it keeps workers at their desks on task longer, by turning the hour-long lunchtime trek to a store into a 15-minute trip online.
That’s the opinion of Frank Gillman, who oversees 450 corporate desktops as director of technology at Allen Matkins, a Los Angeles-based law firm. “When you work the kind of hours that most people at law firms work, there’s a benefit to telling an employee to go ahead and buy the dress you need for the party, but buy it online instead of leaving work and spending three hours at a mall.”
But in truth, it really takes more than 15 minutes to consider, select and purchase a dress, or a lot of other items, online, as another story from President Kevin Blakeman of SurfControl illustrates.
Tick tock, tick tock
At a conference presentation on employers’ use of filtering software several months ago, the company’s CEO was challenged by an analyst who argued that web shopping was a workplace time-saver rather than time-waster. His evidence? He’d just purchased a PC online, taking a total of 20 minutes to assemble the shopping cart, pay for it and complete the transaction. The web had turned what would have been a lengthy visit to a real-world store into an online purchase that took well under half an hour. When probed further about the purchase, however, the analyst realized he’d spent as much as seven hours online researching reviews, specifications and pricing. “The buying transaction was very efficient, but he’d spent a lot of time-he admitted prime working time-doing the research. It was a bit of a false economy,” says Blakeman.
Workers don’t tend to log onto non-business sites for hours at a time. Some 31% of those in the Vault.com survey believe it’s okay to do so for up to 30 minutes; another 24% say they cut themselves off at 15 minutes. But 15 minutes here and a half-hour there across the enterprise do add up, and some studies cite workplace web surfing for big productivity losses and wasted corporate bandwidth. SurfControl estimates that non-work-related web surfing costs American businesses some $54 billion in lost productivity each year. The most spectacular recent example was the Victoria’s Secret lingerie fashion show webcast on May 18. Conducted at 3 p.m.-smack dab in the middle of a Thursday afternoon-the event drew more than 1 million viewers at a time and cost corporate America an estimated $120 million in productivity as employees logged on to the 44-minute webcast, estimates filtering software maker Websense.
“Just one employee streaming the webcast was the equivalent of downloading the entire Encyclopedia Britannica onto his or her workplace network,” says John Carrington, CEO of San Diego-based Websense. “That’s a huge drain on corporate resources and employee productivity.”
The cost, the cost