It used to be so simple. When the World Wide Web was young, and the notion of a global network of consumers seemed so easy to understand, all you had to do was put your product catalogue online and wait for the flood of business to pour through the door.

The trouble was, with a few odd exceptions, it never arrived. Many of the first companies in cyberspace found themselves marooned in a barren digital desert with few visitors and even fewer sales.

The millions of anxious buyers from around the world never materialised and those that did make it through the virtual door were not the ones expected. Instead of grasping greedily at every cyber-product on the digital shelves, whatever the cost, they asked awkward questions about discounts and service and online security. And when told that "list price" means list price, and if they liked they could call long-distance to read a credit-card number over the phone, they went away never to return.

Electronic commerce has been a salutary lesson for many who thought it would be easy. Is the problem the medium or the marketing message? In truth, probably a mix of both. Expectations need to be tempered with a sense of reality about what can be achieved and when.

The Internet is a new sales channel. It isn't the only sales channel, nor is it likely to be. Some people have been keen to be on the Web, but once they have got there they have not really been trying to sell, they have been waiting for the business to come to them. If you do that, all you get is an online catalogue, and that's unlikely to work.

You need to KEEP YOUR SITE FRESH AND LIVELY AND INTERESTING so that people come back to it. Just like any other kind of campaign you need to keep it moving. And when people do visit, you have to work hard to give them what they want and use the technology you have to make the site as effective as possible.

A prime example of a successful Web site is that of RS Components, a major UK supplier of key parts for the IT industry. Before the Net, it had a huge paper-based directory of products that was expensive to maintain and impossible to keep up to date with the latest price changes. But when RS went online it didn't simply look upon the move as a way to cut its own expenses. Instead, it sought to serve its customers better and link orders to other potential sales in a way that was impossible before.

Now when RS customers order online they receive the latest prices at the time of the sale and see any current discounts that are available. If they order a modem cable, the Java-based sales-processing system will ask them if they need a modem to go with it, and offer a list of available models. By using this ability to cross-sell the average online visit results in an order 10% higher than it would have been from a normal catalogue and gives the customer a better service.

This emphasis on customer value is important to any successful e-commerce venture. It is one reason why UK banks have failed to come up with any compelling online consumer finance solutions. In the US, most banks are moving towards Internet-based systems with an open interface that allows users to choose how they process transactions - through their Web browser or a common personal-finance product such as Quicken Intuit or Microsoft Money. The UK clearers have, so far, taken a more cautious approach, opting for solutions which force consumers to use specific products, whether they like it or not.

Very few of the banks have grasped what it is all about. Outside banking, most people believe that a KEY ISSUE IS CUSTOMER LOYALTY. That's one of the big reasons why you see companies like Tesco going into online shopping - it's a way of allowing their customers to buy from them at a time when they are unlikely to want to go into a store. Online banking is still in its infancy in the UK but a lot of the banks are seeing it as a way they can save money. They can, of course, but they have not understood yet that the service needs to be interesting and interactive to their customers. They want online banking to be what they are looking for, not what the banks want.

Most successful e-commerce sites offer a complete enclosed shopping experience, whether for holidays or components for electronics systems. Too many sites still use their Web pages to produce lists of products that can only be bought through a telephone call. Some travel services offering air fares are little more than a recital of sample prices and an exhortation to call the office for the latest ones. The canny buyer could probably get a better idea of what is on offer by calling up Teletext.

Sites that work tend to engage the interest of the potential customer through online devices that allow visitors to create their own products or mix of items using an interactive online form. This way, you can customise your own wine selection, personal computer or travel itinerary, see what it costs, check availability or delivery dates and, finally, place an order on screen using a secure credit-card transaction.

All this takes time and money to develop, of course, but the cost of creating custom online transaction systems has fallen dramatically over the past year. Much of the hard work lies in envisioning the service you want and tying it into existing legacy systems for jobs such as sales-order processing.

The hard truth is that a SIMPLE PRESENCE in cyberspace may be little more than a sop to peer pressure for some kind of Net site, however ill-conceived. It is UNLIKELY to generate real sales unless it is part of a specific, well thought-out marketing plan that offers values and benefits to your customers.

Defining who those customers are is important. When familiar high street names such as Tesco make moves into online commerce the news, naturally, grabs the headlines. But the truth is that giant retailers are playing a very long game here - and they have to be, given the size of the current consumer audience for the Net in the UK.

There is not a high number of individuals just now. However, the economic profile of those who do use the Net is upmarket and free-spending, just the people retailers want to attract. This will change, probably quite rapidly, when you start to get an access device included in the cost of your Internet connection. But the reality is that the major market for e-commerce at the moment is the business-to-business one. EDI (electronic data interchange) never really worked because there were many different standards out there . The Net does away with all this and leaves you with one great solution that works everywhere. That is where the biggest share of the market will be.

This will lead to the creation of a growing number of business-to-business relationships between suppliers and customers based on shared e-commerce solutions. Large companies will use the system to control the relationship with suppliers to a fine degree, bringing in "just in time" systems which trigger wholesale orders based upon sales, rather than buying for
stock. And for smaller companies working for the bigger fish in this digital ocean there will be benefits too - faster, more accurate ordering procedures, less paperwork and one day, perhaps, that great benefit that EDI never really did deliver, timely settlement of accounts.

The reality facing most business-to-business companies is simple. Before long their customers will be demanding the facility to browse product lists and order online - and taking their money elsewhere if you cannot deliver it.

To work, e-commerce seems to require some compelling need, preferably one which works to the advantage of both parties. Without it, a Web presence can be little more than an expensive piece of virtual vanity, unloved, unvisited and intrinsically unprofitable. In the end, e-commerce is about business much more than it is about technology.