Internet marketing services UK

The UK government is aiming to make 90% of its routine purchases electronically, but are Internet marketing services likely to grow at this rate? Is Internet marketing really so tempting?

Where's the growth in Internet marketing ?

The business-to-consumer sector is expected to reach $5bn in 1998,
However the business-to-business sector will soar to $17bn this year and $105bn by the year 2000; front runners in internet marketing are financial services, travel and IT providers

The real boom is therefore in business-to-business marketing

(How) Does it Affect Customer Loyalty?

New research by Stanford Business School shows loyalty:

Diminishes - where shoppers do not need to sample the product - e.g. CDs, PCs, as they make their decision by comparing prices at the click of a mouse
Increases - where sampling is required, e.g. footwear - as customers go straight to the product they already know and trust

Customers are therefore most fickle where the product does not need to be tried and the brand does not matter, or is just one of many

Who's Making Money?

Product providers - who are now able to cut out the retailer middle man
Info providers - still uphill nearly all the way to persuade users to pay for what they need
Service providers or "portals" such as Yahoo - no cash-flow problems, as fees for "premises" in their on-line malls continue to rise

Examples:

Product: Dell Computers makes sales of >$4m/day from its website, up from $1m/day last year; has hallmarks of a "cyber sell" product - no sampling required (a PC is a PC) and is right on target (techie net users buy techie goods)
Info: the Wall Street Journal's Interactive Edition shows the power of a strong brand and a product driven by business-led content (it is easier to justify buying info if you can argue it will help you make money): WSJ now claims over 150,000 paying customers; but with a team of 100 to run it, great distribution but how much margin?
Service: earlier this year, three brokerage houses agreed to pay $25m each for prime real estate in AOL's mall
The Automobile Association is soon to close all of its 142 high street shops; likewise, Victoria Wine and Thresher off-licences plan to close 300 shops after they merge.

Portals have the power and therefore have the profits

Is it any more Secure?

The mountain: of 2,000 corporate purchasing decision-makers in the more cyber-smart US, some 70% said they do not buy over the Internet for security reasons
The molehill: from its 2.2m customers in 160 countries, Amazon.com has yet to receive a single complaint relating to fraudulent use of a credit card when paying over the Internet

Could it just be an excuse?

Still Cyber-Sceptic?

A report from Andersen Consulting has found that though 80% of 300 European execs recognise the strategic importance of e-commerce only 40% are doing anything about it.

So - Your are not alone!