David Bicknell E-business E-commerce was a factor in seasonal
retail figures for the first time in 1999, but as Toys 'R' Us
shows, a company that is in trouble will not be rescued by an
e-strategy alone
With another e-Christmas behind us, now comes the shake-out at
those firms that performed poorly.
Some did miserably, including Toys 'R' Us which suffered at the
hands of rival eToys, and was hampered by order fulfilment woes.
Now, though Toys 'R' Us has a new CEO, John Eyler, who has promised
to put things right.
Eyler admitted that the retailer had had "three or four years of
bad news", and his priorities include installing systems and an
order fulfilment infrastructure to cope with the next holiday
season. The company was unable to deliver orders in time for
Christmas 1999, because it was not prepared for seasonal
demand.
Not prepared? How can a toy company not be ready for seasonal
demand? One US retail analyst suggested that the new CEO is
unlikely to have much of a honeymoon period on Wall Street. I'll
say.
Stores group Kingfisher and French holiday group Club-Med both
announced significant e-business efforts last week.
Kingfisher, which owns Woolworths and Comet, will spend about
£50bn on Net development in the coming financial year. That is on
top of £21m spent this year.
It is a similar story at Club Med, which wants to expand its
sales channels with the launch of Club Med Online, a newly created
subsidiary. It hopes to enable online booking and buying within
three months.
Club Med said the Net is already contributing to its sales, as
visitors choose destinations online then visit Club Med
agencies.
Existing licensing and distribution agreements are expected to
be extended to the Internet, the company said last week.
Much has already been written about the AOL-Time Warner deal:
about how it legitimises e-commerce; about the coming together of a
.com and a bricks-and-mortar giant; about how the "cockroach of
cyberspace" - AOL - founded in 1991, merged with an amalgam of two
companies, Warner Brothers and Time Magazine, both founded in
1922.
Apart from the sheer scale of the deal - $350bn (£200bn) - and
the likely effect it will have on smaller media companies - a host
of partnerships or mergers - the deal could spark changes in the
way Web pages are developed, and how the Internet grows.
US experts believe the deal paves the way for the speedier
introduction of broadband devices to access the Internet. This in
turn means that Web developers may have to develop better features
for higher speeds.
In particular, this applies to Web-based retailers, who have
wanted to add better graphics, streaming video, 3D interactivity
and other options to give online shoppers a more comprehensive view
of the products for sale and "a better Web experience".
What else could the deal mean?
- Letting Microsoft off the hook in its anti trust case.
Microsoft could argue that in light of the AOL-Time Warner deal -
which itself will need regulatory approval - why should the US
Government consider breaking Microsoft up?
- Better options for consumers with the match between AOL's
online music offerings, including the Spinner.com radio service,
and Winamp music player.
- A bolstering of AOL's online TV effort, which plans to offer
"enhanced TV services" running on set-top boxes.
- A possible return to the browser wars. One New York-based
analyst has predicted that the company may switch its browser to
Netscape.
AOL owns Netscape already, so you might think that Netscape
would already be its chosen browser. Not so. Apparently, problems
with Netscape 4.0 have left AOL using Explorer, but that might
change. The scenario is that with AOL releasing version 6.0 of its
software in April or May, and Netscape releasing version 5.0 around
the same time, AOL could switch to Netscape.
The upshot of that is that Web designers could find themselves
having to redesign pages originally written for Explorer. It is
unlikely that Microsoft will allow that to happen without a
fight.
David Bicknell
Jack Schofield