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Stick with B2C, firms advised

Daniel Thomas
Companies should consider holding as much as 30% of the total e-business budget for "sell-side" initiatives, ignoring the pressure to shift investment away from business to consumer (B2C) e-commerce, Gartner said last week.

Analysts advised companies to keep investing in B2C despite economic uncertainty, expecting B2C in Europe to experience a renaissance within three years.

Mark Raskino, research director at Gartner, said that e-business departments face a challenge in defending B2C in the current climate. "The pressure will be to shift investment away from B2C for two main reasons," he said. "Because it is unfashionable - discredited by the excess hype of the dotcom era - and because B2B buy-side initiatives may appear to be the projects that will save money."

But the economic downturn is an opportunity, not a threat, Raskino said. "It is an ideal time to renegotiate with service suppliers. You should be looking at saving at least 10% while advertising is cheap," he said. "Companies should also be making tough business decisions that drive return on investment."

Investing in B2C makes sense because it is the most mature form of e-business, Raskino said. "Businesses should consider holding as much as 30% of the total e-business budget for sell-side initiatives, so that they emerge [from the economic downturn] ready," he said, advising that priority be given to customer retention.

"Post the dotcom boom, businesses can take more control of their own agendas and direction rather than responding to over-hyped competitors," he added.

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