Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
Ten-year-old Holt Educational Outlet in Waltham, Mass., sold toys through a catalog and a single store before it launched an e-commerce initiative in 1997. Then it built a full-featured, friendly Web shop as a test site for Microsoft Corp.’s developing Internet technologies, and business soared. During the Christmas season last year, orders sometimes topped 1,000 a day. Subsequently, Holt’s top executive bought the company from its parent firm and has reorganized it as Toysmart.com Inc. to focus on Internet sales, which today account for more than 80% of its business.
Such success will be replicated constantly if Redmond, Wash.-based Microsoft has its way. The company recently laid out a series of new products and initiatives to make it easy for retailers to get online.
Microsoft’s goal: help 1 million businesses begin selling on the Web. “Microsoft is putting more strength and resources into e-commerce,” says Elizabeth Hudson, vice president of business development at Microsoft partner ClearCommerce Corp. of Austin, Texas, which provides Web stores with order processing wares.
Concurrent to Microsoft’s initiative, fellow computer giant IBM Corp. has introduced an e-commerce cataloging product that enables retailers to put their goods online fast. Catalog Architect, for use with IBM’s Net.Commerce server software, aims to simplify the process of collecting, manipulating and managing product information for the Internet. “It allows you to capture information about a product once and then use it throughout your site,” explains David Liederbach, director of e-commerce marketing for Armonk, N.Y.-based IBM.
Microsoft and IBM have been busy refining their e-commerce strategies, observes Robert J. Staff, chief economist at Zona Research Inc., an Internet consulting firm based in Redwood City, Calif. “Microsoft is working to put a lot of bells and whistles together to do e-commerce,” he says. “It’s going to be in components, and it’s going to be able to be integrated with their platform.” IBM’s approach to e-commerce, he adds, has been to work mostly through its business partners, who tailor IBM technologies to customers’ needs.
New Microsoft services include building and hosting Web sites and offering them space on its portal site, MSN. The company has enhanced its back-end e-commerce platform as well, adding a technology called BizTalk that will allow retailers to mix platforms and technologies.
IBM’s new idea for retailers is meant to cut the time it takes to get a catalog’s content online, from item names and descriptions to sizes, colors and photos. And once it’s there, a retailer only has to change an item’s price once, and everywhere that price appears on the site is automatically updated.
The tool also enhances retailers’ ability to personalize their Web sites. “A customer can tell you they are looking for a red cotton shirt priced under $15 available in a size large,” Liederbach says. “Catalog Architect allows you to show them exactly what they want.” Catalog Architect is designed in a basic spreadsheet format and costs $3,000 per license. For now, it can be used only with IBM’s Net.Commerce program.
Silver Spring, Md.-based Information Systems and Services Inc. plans to use Catalog Architect with wholesale customers who manage data on thousands of items. “It’s a good way to organize product information in one central repository,” says Ed J. Shields, the company’s general manager for Internet solutions. “It also checks information to see if anything is missing. These are things you couldn’t easily do before online.”