Ghosts of E-Business Past, Present & Future

In the immortal words of philosopher and cultural critic George Santayana, those who do not learn from history are condemned to repeat it. Ebenezer Scrooge, the protagonist of Charles Dickens’ famous play A Christmas Carol, likely would have agreed with this sentiment.

In a similar vein, as the holiday season progresses and the prospect of an economic recovery looms, e-businesses would do well to heed the lessons of their fallen predecessors. Like ghosts of e-business past, infamous flameouts like Webvan and may hold valuable lessons for today’s survivors about where the industry has been, what issues e-commerce companies now face, and what challenges are likely to loom in the future.

Can e-tailers learn from past failures, navigate the challenges of the present and face the future with renewed prospects for success?

Chilling Past

Amid the economy’s hard downward turn a few years ago, dot-coms were in the thick of the chaos. Many companies that had been founded on shaky business models faded away to nothing, leaving behind only remnants like leftover T-shirts and Aeron chairs. However, other Internet companies had such intriguing rises and falls that it seemed they had been created just to serve as warnings to others.

For example, Webvan turned out to be an example of poor arithmetic, since the company was paying more for its products than it was charging customers. proved to be a portal that led nowhere, and lost US$48 million in trying to convince models and actors to put their portfolios online.

Some dot-coms tried to cash in on markets that did not need online components, such as, which tried to sell caskets and burial plots and ended up losing $26 million in the process. The list, from Flooz to, goes on and on.

As IDC analyst Jonathan Gaw told the E-Commerce Times: “It was just a huge implosion, and all of the dot-com stocks went down. But the ones that survived are the stronger for it.”

Root of the Problem

However, it is not enough just to look at the past and shake one’s head in disbelief at e-business blunders. Gaw noted that for e-businesses in today’s environment, it is vital to understand past mistakes to avoid repeating them.

“The problem with the dot-com era was that we had a mantra that the rules [had] changed, that everything was different,” he said. “In some ways, that was true, because the rules did change. But in other ways, it was false, because the principles remained the same. We confused rules [with] principles.”

Gaw added that the Internet’s rise was similar to the invention of the airplane, which did change the world and the rules of travel. However, it did not change the underlying principles of flight. “Gravity still works the same, whether there’s an airplane or not,” he noted.

Similarly, business principles are a constant, and it is up to e-commerce companies to learn — and successfully apply — the basics.

Present Tense

Indeed, if there is a bright side to the dot-com mass extinction, it is that companies now are open to learning from the past, rather than insisting that everything has changed and old rules do not apply. The loss of so much money has not been forgotten by survivors of the e-business shakeout — and neither have the pain of layoffs, unreturned phone calls from venture capitalists and derision from consumers.

Philip Kaplan, founder of dot-com deathwatch site F***, told the E-Commerce Times that when he visits a company now, management and employees are keen to show they are not squandering money as in days past.

“They almost brag about how crappy their offices are and how bad their parties are,” he said. “It’s like they’re proud of it. But I think they’re just trying to distance themselves from what happened.”

Some lessons remain to be learned, though. Although the bad old days seem to have passed, e-commerce companies still face significant challenges in the present. Some of these hurdles are standard business difficulties, including retaining customers, determining adequate pricing strategies, maintaining proper staffing levels and keeping up with the pace of technology changes.

Other issues are more e-commerce specific, such as perfecting online usability and earning customer trust in an age of identity theft.

Future Perfect?

If today’s e-commerce companies could be visited by a Ghost of E-Business Future, they likely would want to know what challenges they would face in coming months and years, so they could prepareto meet them.

One area that still presents a challenge and will continue to do so in years ahead is usability and navigation. Jared Spool, founding principal of usability firm User Interface Engineering, told the E-Commerce Times that some e-tailers still do not know why customers come to their sites. He said this lack of insight likely will not be overcome soon.

“We see it all the time, that one little piece of information turns out to be tremendously important,” he said. “Making a site usable is a process that takes understanding and time. There is still a great deal to be learned.”

Pendulum Ready To Swing?

Some contemplative e-business executives may be able to gain a deeper understanding of usability, basic business practices and customer management as time passes, but not all of them will succeed, Gaw warned.

“We’re kind of like dogs,” he said. “We have really poor memories. That both helps and hurts…. You need to have a short memory to take risks and be aggressive. But it hurts when those risks do not pan out.”

He noted that in the e-commerce industry, as in other sectors, the pendulum swing of business means that the aggressiveness of the dot-com era is currently being counteracted by conservatism. In the future, the pendulum may begin swinging back toward exuberance.

“You see this swinging in everything, from business to politics,” Gaw said, “and pretty soon you realize that this is just the way life is.”

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CRM Buyer Channels


How AP Automation Bolsters Supplier and Customer Relationships

accounts payable

Retail companies have always succeeded or failed based on how well they serve their customers. When service is consistently great, it’s that much more likely that customers will become loyal to a specific retailer.

That’s a big deal because — while they might account for only 15% of a retailer’s customer base — loyal customers can drive as much as 70% of all revenue. Create more loyal customers and the results will follow.

On the flip side, when the customer experience is inconsistent or hits a speed bump, customers are quick to find a substitute. After all, the customer experience is a key differentiator today, and competitors are always a quick search away.

In today’s fast-paced, on-demand world, customers expect orders to be in stock and shipped quickly. If they go to a website and products aren’t available — or they’re told they need to wait weeks to get something — that’s a customer service breakdown that could lead them to search elsewhere.

When retailers are suffering from supply chain and operational problems, they’re incapable of delivering exemplary customer service in each interaction. For this reason, retailers need to focus on strong supplier relationships to keep customers happy and satisfied. By doing so, they can mitigate supply disruptions while offsetting rising inflation and increased labor costs while ensuring their products are available to customers where and when they need them.

One way retailers can minimize supply issues and strengthen supplier relationships is by automating accounts payable. AP provides a key interface with suppliers and is the lynchpin to getting those suppliers paid on time. Slow, tedious AP interactions will lead to difficulties with suppliers.

With an AP automation solution in place, retailers can achieve streamlined and automated straight-through processing of invoices, give suppliers visibility into their payments, and avoid credit holds — all of which enable them to focus more on improving the customer experience.

Achieving Straight-Through Processing

Retailers typically approve supplier invoices using a three-way matching process where they compare the invoice, purchase order, and goods receipt to make sure they pay only for what was ordered and received. When they receive a shipment, they make sure the invoice matches what the purchase order indicates and that the receipt reflects what was actually delivered.

The challenge is that many suppliers in the retail industry are notorious for not correctly including all the necessary information needed to process and pay an invoice. At the same time, it’s not uncommon for suppliers to ship different products at different times — even though they’re on the same invoice — which presents a challenge for three-way matching.

When retailers manage this process manually, it takes a lot of resources and requires collaboration with a number of internal stakeholders, including employees in receiving, procurement, and AP.

By automating the AP process, best-in-class retailers achieve straight-through processing for more than 95% of invoices. This means they are received, verified, and matched without manual intervention 95% of the time, a sharp contrast to the retailers that rely on a tedious, slower manual process.

As a result of automation, the AP function — along with other internal stakeholders — can reclaim a considerable amount of time, giving the organization more resources to devote to enhancing customer service.

Giving Suppliers Transparency Into Payments

Businesses that use leading AP automation solutions form direct digital connections with their suppliers. They grant suppliers easy visibility into the status of payments, which promotes financial stability and prevents them from calling and emailing the AP team to ask about when they are scheduled to be paid, further tying up company resources.

Additionally, AP automation tools give retail organizations visibility into invoice payment options.

With a glance at an invoice dashboard, or with automated rule-driven technology, AP teams can decide which invoices to pay early and receive a discount or hold cash until the invoice is due to extend cash flow.

This helps maximize their cash position, which prevents the need to trim resources elsewhere in the organization to pay bills.

Avoiding Credit Holds

When an invoice enters a manual three-way matching process, payments slow down.

For example, imagine a retailer buys 10,000 shirts from a garment manufacturer with the intent to sell them out of their e-commerce store. For argument’s sake, let’s imagine that the purchase order is for 10,000 shirts and the invoice is for 10,000 shirts, but the retailer only receives 5,000 shirts.

They don’t want to pay for the full order because they’ve only received half of it. So now, they must decide: Do they wait for the rest of the shipment to come in before paying the bill? Or do they pay half now and half later?

Such decisions take time — and, depending on how many issues like this materialize — potentially a lot of it. If suppliers must wait a substantial amount of time to get paid, they may eventually decide to not ship products to you and put you on a credit hold.

Ultimately, this becomes a customer service problem because you won’t be able to fulfill orders and send your customers what they’re looking for.

By automating the AP process, you can avoid these types of delays. Suppliers get paid on time, enjoy visibility into what’s happening with their payments, and rate you as easy to work with. In turn, they are more likely to prioritize your orders should they run into operational challenges or supply issues of their own.

Strengthening Customer Service with AP Automation

When most retailers think about improving customer service, odds are they don’t think about how investments in AP automation can make that happen. But in many ways, AP automation is the low-hanging fruit retailers should grab first.

By optimizing the AP function and enabling suppliers to get more visibility into their payments, retailers can fortify supplier relationships, making it that much easier to keep products in stock, fulfill orders rapidly, and otherwise delight their customers in each interaction.

That’s the ticket to a more satisfied, more loyal customer base — one that’s ready to help retailers weather the current economic storm and end up in a stronger position on the other side of it.

Shan Haq is vice president of corporate strategy and development at Transcepta, a cloud-based procure-to-pay platform based in Aliso Viejo, Calif.

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Digital Skills Front and Center

My analyst life has an interesting ebb and flow to it, as do most professional lives, I believe. My most productive times are when I work heads down on a project drilling into sometimes arcane aspects of the market. From that comes unique information that I share with clients first, then more generally later. Other times I’m swimming in the general pool of CRM explaining my research and learning from others.

I was heads down in the first quarter and am now trying to catch up with other research — which is why I am only now coming upon some very interesting research the Rand Corporation did for Salesforce late last year. The research, published in the 2022 Global Digital Skills Index, paints a startling picture of how our industry  — actually our world — is significantly underprepared for its digital future.

Before we go further, let me say this is a good piece of work but it is the kind of thing that can and has been published every decade since the mini-computer revolution. Of course, we’re underprepared and even behind where we need to be to take advantage of the technologies available today.

There’s often a lag like this in technology rollouts, but then we catch up; it’s something I can say from my vantage point in the long tail of my career. However, none of this is intended to reassure us that we don’t have serious work ahead. A report like this simply tells us where to concentrate the effort.

That effort is bigger than CRM, though it is being trumpeted by an important CRM company. Thanks to Salesforce and companies like it, CRM is now connected to everything and it drives decisions and developments in many sectors.

Good News, Bad News

The report surveyed more than 23,000 workers in 19 countries and found that most of the people expected to have a handle on digital business seem to know just enough to get by. They know what they know and what they don’t — so the findings are full of good news and bad:

  • Good news: collaboration technology skills have the biggest percentage of “advanced” practitioners. Bad news: this still only equates to roughly 25% of survey respondents.
  • Good news: 58% say encryption and cybersecurity skills are particularly important. Bad news, only 14% claim advanced knowledge of the subject.
  • Good news: nearly half of all respondents see digital sustainability skills as important in the next five years. Bad news: only 16% say they have advanced digital skills for operating technology that promotes sustainable business activities like tracing, measuring, and analyzing climate data within an organization. This includes executives.

You might point out that these are advanced skills and not necessarily the skills that rank-and-file employees are expected to use daily, but that’s not so. The report also identifies everyday skills deficiencies as well as generational deficiencies. Hint: the older you are, the more technologically out of touch you might be. In other words, your kids might have a point.

Some examples from the report:

  • Two-thirds of respondents say they’re unprepared for social media skills that the workplace will require over the next five years.
  • Only 17% of Baby Boomers believe they are “very equipped now” for digital-first employment.

All of it adds up to $11.5 trillion in cumulative GDP at risk in 14 of the G20 nations. In total, workers across all those countries scored 33 on a scale of 100 on the Digital Skills Readiness Index. If you break things down further, the U.S. is slightly above average, clocking in at 36, but that’s nothing to brag about. So, what to do?

Hurt and Rescue Approach

In selling there’s a basic strategy called hurt and rescue. You hurt your prospects by calling their attention to a business problem which only you can solve with your product. It often works and not just in tech. Keep it in mind as you watch commercials. But none of this means the hurt isn’t real and in need of repair. So what to do? The report provides the hurt.

As they say in the 12-step programs, we need to admit the problem. We don’t, for the most part, work in factories stamping out millions of identical products. The population identified in this report are knowledge workers producing at least somewhat customized work-products. It should surprise no one that they (we) need retraining from time to time; not just in our core competencies but in the tools we use to do our jobs.

The rescue is not simply in the number of ways that Salesforce provides for helping organizations to train and update their employees, even if they are working remotely. It is in providing the leadership that says we’ve got to do this.

No employee and no business are likely to have identical needs, but skills are general and transferrable. Before a business can claim some of that $11.5 trillion of GDP up for grabs, its people will need to become more digitally savvy.

That’s the crux of the report and, frankly, it’s not very surprising. Salesforce put a name to it and offers plenty of examples of needed solutions. Whether you use their solutions or others on the market, the work paradigm is changing and now there’s hard data to stimulate thinking about how we need to work by mid-century or sooner.

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.

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