FACTORS THAT CAN SLOW GROWTH

The Internet, the Web, and e-commerce have their peccadilloes. External elements, including the public at large, and governments, have not yet weighed in with a final opinion regarding this new behemoth. The public’s concern about security and the personal information that websites amass must be addressed before the public takes action of its own. In the other arena, a crucial and as yet unresolved factor that could impede the growth of e-commerce is the degree of governmental involvement including regulation and taxes.

Customers’ Security Concerns

The general population believes the Web is an unsafe place to conduct transactions — specifically credit card purchases. But this perception will change as the customer gains more experience on the Web using sites that incorporate digital certificates, the SET protocol, and SSL. The technology is here — many websites use secure servers for online transactions. These servers encrypt data that is sent over the Internet so that a third party cannot intercept the information. Thus, many consumers will purchase products from a website when convinced that the technology is in place to safeguard their transactions and that the website itself is built upon a promise of integrity and trustworthiness.

Trust and e-commerce are mutually dependent. Although technology, such as using digital certificates, helps in the battle to instill trust, branding is the key. Your brand is the gauge a customer uses to assess quality and reliability. Stand by it and make it a symbol of your contract with the customer to provide not only a product but also service and satisfaction. Would you trust something if American Express endorsed it? Do you trust Lands End? Customers need the reassurance of familiar brands (new, old, traditional, and web-driven), and assurance that the technology is in place for a secure credit card transaction to build the trust required to take the first steps toward an online purchase.

Privacy Issues

The ability to guarantee the customers’ privacy is an important challenge. The extent to which a website uses personal information concerns every Internet user. How much does the surfing public want the web community to know about them?

The growing trend toward personalization on the Web will have a considerable impact on e-commerce. While personalization does not translate into direct sales, it brings the customer one step closer to a purchase. If handled correctly, your customer may appreciate a familiar relationship that could include the recommendation of additional products or of timely notices of sales. But if you abuse it, you’ve lost a customer.

Still, personalization tools are becoming more prevalent. That’s because, the better you know your customers, the easier it is to know what the individual customer wants. How you obtain the information necessary for this personalization is the issue. Some websites ask for information outright, and then use rules-based filtering systems or adaptive prediction technology that can provide real-time learning of customer likes and dislikes based on mouse clicks.

An information exchange is fair game — I answer the questions and then the website gives me a $5 coupon, a 20% discount, a t-shirt, etc. That website has literally become a storehouse of my personal information. If my information is passed on to another party without my permission, I take issue. This is where the e-commerce community must police themselves or the government will step in to regulate how websites use and exchange a customer’s personal information.

Bear in mind that websites that utilize personalization tools, if managed properly, are rewarded as early innovators. The websites that have amassed personalized profiles can get to know their customers over time. The longer websites wait to adopt personalization, the greater head start their competitors will have in using personalization tools to gain a foothold in the customer base, making it unnecessary for those customers to seek out other sites. Personalization tools lend themselves well to the early adopters who have established a brand on the Web and who have focused on creating a long-term relationship with their customers.