John Barker writes: Flash in the pan
Inside Multimedia
Stenenage
Aug 14, 2000
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Special Volume/Issue: Issue: 224
Start Page: 1
Personal Names: Barker, John
Abstract:
The future for dotcoms is now exceeding bleak. Last week Clickmango.com
announced it was ceasing operations in September. It is in discussions
with major offline retailers, including Boots, the major supermarkets,
and health insurance companies about strategic partnerships that might
provide a lifeline for the company. ToyCity.com, a Denmark-based pan-European
toy e-tailer has ceased taking orders due to lack of funds. Dressmart.com
has closed its European operations and its Swedish backers have begun
liquidation
proceedings. The offices of Buy.com France and Buy.com Germany have been
closed. Even Amazon, in a matter of weeks, has seen its valuation drop
from $100 per share to just $30.
The transformation from 'bricks and mortar' to 'clicks and mortar' appears
to be happening without the widespread disintermediation (job losses) that
the jeremiahs predicted. The job losses are in the clicks, not the bricks.
The bricks are snapping up the clicks. Don't feel too sorry for Toby Rowland
(son of the infamous 'Tiny'), Joanna Lumley and Lord Rothschild at click.mango
- they will survive.
So is the Internet revolution over, just a flash in the pan like CD-i
or Laserdisc or tulip bulbs? Not at all, the revolution has only just begun.
It's 'two steps forward, one step back' time. If you know exactly what
you want and don't want the pleasure of travelling to collect it then the
Internet is the place to shop. But B2C e- commerce is not the essence of
the Internet revolution. It is merely yet another example of an extension
of choice for the consumer. Therein lies the real revolution - the power
that has suddenly been put in the hands of the consumer. John Doe is now
running the show, not big business.
Copyright Phillips Business Information Corporation Aug 14, 2000
Full Text:
The future for dotcoms is now exceeding bleak. Last week Clickmango.com
announced it was ceasing operations in September. It is in discussions
with major offline retailers, including Boots, the major supermarkets,
and health insurance companies about strategic partnerships that might
provide a lifeline for the company. ToyCity.com, a Denmark-based pan-European
toy e-tailer has ceased taking orders due to lack of funds. Dressmart.com
has closed its European operations and its Swedish backers have begun
liquidation
proceedings. The offices of Buy.com France and Buy.com Germany have been
closed. Even Amazon, in a matter of weeks, has seen its valuation drop
from $100 per share to just $30.
The future of all pure online e-tail models, such as Clickmango's, have
now been thrown into serious doubt. Thinknatural.com, and Nutravida.com,
Clickmango's closest rivals in the UK, are both pursuing strategic partnerships
with bricks and mortar retailers to merge their operations in various ways,
rather than continuing to search for extra venture capital or through public
flotation.
All this will come as no surprise to Inside Multimedia readers. We have
been pointing out for some time that dotcoms are, in the main, merely shop
fronts. They are windows through which you observe products you wish to
buy. Someone still has to make the product and deliver it. This fact seems
to have been overlooked in the lemming like rush to become dotcom millionaires.
The rumour that the retail superstore is dead was greatly exaggerated.
I had a dream the other night. It was a future cyberworld scenario in which
a bright young executive comes rushing in to the boss: 'I've had this brilliant
idea. We get the customer to come in, pick the goods herself, pay for them
on the spot, then transport them back home in her own car'. 'Gee Fred,
that's a great idea. Let's do it, we'll call it a hypermarket. We'll make
millions'.
It's time to cut the crap and face facts; the big winners in the B2C
e-commerce revolution have been the likes of Amex and Fedex, both so-called
old economy companies. That lends weight to my assertion that there is
no such thing as an old economy company. Those so- called old economy companies
are now busily snapping up the so- called new economy companies; at bargain
basement prices. They are doing so because they need a Web-dimension to
their activities - they need a new shop window. Ta, very much.
The transformation from 'bricks and mortar' to 'clicks and mortar' appears
to be happening without the widespread disintermediation (job losses) that
the jeremiahs predicted. The job losses are in the clicks, not the bricks.
The bricks are snapping up the clicks. Don't feel too sorry for Toby Rowland
(son of the infamous 'Tiny'), Joanna Lumley and Lord Rothschild at click.mango
- they will survive.
The real revolution
So is the Internet revolution over, just a flash in the pan like CD-i
or Laserdisc or tulip bulbs? Not at all, the revolution has only just begun.
It's 'two steps forward, one step back' time. If you know exactly what
you want and don't want the pleasure of travelling to collect it then the
Internet is the place to shop. But B2C e- commerce is not the essence of
the Internet revolution. It is merely yet another example of an extension
of choice for the consumer. Therein lies the real revolution - the power
that has suddenly been put in the hands of the consumer. John Doe is now
running the show, not big business.
The consumer is now running the show and examples abound:
* the music industry has been grossly over-charging for years for CDs.
Along comes Napster and overnight the music industry is being forced to
re-invent itself and discover the joys of MP3 and cheap downloadable music.
* the bloated banking industry has suddenly discovered the customer,
faced with competition from every side. The Internet allows us to shop
around, move our money or our insurance or our loans to whoever pleases
us. No longer are we charged for removing our own money from a hole in
the wall.
* no longer are UK punters prohibited from buying pornography in a shop
when they can so easily buy it on the Internet.
* patients are often more knowledgeable about their condition than the
doctors who serve them. The British Medical Association is reeling from
a whole series of scandals as the consumer speaks out after discovering
that doctors do not walk on water.
In other words, the peasants are revolting. Law firms, estate agents,
insurance companies, banks, car distributors, music companies are all running
scared, pouring money into Internet initiatives because they know they
are in danger of being marginalised by the competition. Knowledge is power
- lawyers and doctors have known that for years. Now the consumer has got
it - the boot is on the other foot.
For years I have been sermonising about the coming Information Society,
without knowing what it really means. Suddenly I know what it means, I
can see it with my own eyes. The Internet has given the consumer access
to information in a manner undreamed of by those who invented the term.
It is that access to information that has created the revolution. It is
the reason the peasants are revolting. They just discovered they are not
peasants any more; they are kings.
The 'dotcom millionaires' are nursing their worthless stock options
and wondering what happened. The rest of us are living in the real world,
realising that there is no such thing as a free lunch.
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