Let's talk some serious business here! Whatever your marketplace orientation, you need to understand that there is a dramatic revolution occurring right now and it is definitely going to affect you one way or another—very likely sooner than later. Every sharp-eyed shopper and purchasing agent looking for new ways to stretch a dollar, along with every savvy manufacturer and service provider perpetually honing a competitive edge, is paying very, very close attention. How you handle this one could be critical to your bottom line.
This no time for a business to switch to the Ostrich Paradigm! Embracing the "ignore" or "wait and see" attitude may hurt, even in the short run. A strategic break from the daily battle of the marketplace is in order. Come up for some air and look around. Don't worry; there isn't anything subtle about this. It's as big as a freight train!
There is thunder, lightning and a flurry of activity all around, and once you focus your vision you won't have to add a rocket scientist to your staff to conclude that your business will be affected by the whirlwind—more aptly labeled a tornado—surrounding the move to the WWW. On the other side of the equation, spendthrifts and penny-pinching buyers, either on your own account or the company's, it doesn't matter how little or how much you shop...you can't afford not to become very familiar with these sources.
You see, the largest mall in the history of the world has set up shop almost overnight! It's right in your neighborhood and your competitor is there, offering outlet pricing. Don't bother to run to the window to look and listen for the normal cacophony of pounding hammers, saws, and heavy equipment. It's not there. Until recently this has been a silent revolution sneaking up on many astute businessmen. However, now the ringing of cash registers around the world is getting too loud for even the most smugly secure retailer to ignore. (See Walmart below.) Are you ready? Just tune your computer to the WWW and step into the incredible world of online selling and buying.
Let's call it the "Mall of the World" in memory of Minneapolis/St.Paul's "Mall of America." The latter, as you might know, is the name of the largest brick-and-mortar shopping center in the world. I recently had an evening free in the Twin Cities area and couldn't pass up the opportunity to visit this astounding, would-be, shoppers' paradise.
Four hundred fifty stores on three levels are serviced by over 13,000 parking places, 44 escalators, and ten sets of public restrooms. With over four million square feet (90 acres) of space under-roof, and dozens of restaurants and hotels all around, shoppers can dive in for days, and they do! Shopping 'til you drop (on one of the benches provided) is an everyday occurrence there.
However, as I wandered around and tried to read into the faces of the shopkeepers, some appearing anxious, most oblivious, it was with some nostalgia that I realized I was actually visiting a living museum. This was the last in an evolutionary chain of huge, bigger-is-better, shopping centers. The end of the line. The final, extravagant symbol of 20th-century shopping excess. But unbeknownst to most proprietors there, one already relegated to distant second fiddle. One already condemned to die a lingering death just a few short years after its creation.
The lesson was there to be seen. It was Brontosaurus, its gargantuan dinosaur predecessor. With its ravenous appetite (for shoppers), its staggering needs caused it to range further and further from home. Even a joint venture with Northwest Airlines to bring a continuing stream of shoppers (fodder) from across the Midwest and as far away as Japan was proving futile! It just doesn't make continuing economic sense. This is no competition for the "Mall of the World" already a quantum scale larger and only a mouse click away on the World Wide Web.
Why is the change so certain? It's easy. Customer and seller advantages abound! Compare the complication, expense, risk and customer base limitations of setting up a new storefront on Main Street, USA. There's the building itself, followed by equipment, salaries, benefits, employment laws, paper catalogs going out of date, etc. Then consider the advantages of the WWW and the opportunity to sell to the world from your bedroom closet if you wish, with no one the wiser. Spurred on by the incredibly favorable rates offered by Internet "leasing agents," at $2 a megabyte per month, it's no wonder an unprecedented business expansion is underway "at the Mall of the World."
Thousands of businesses are signing on every week. TheOpen Market Commercial Sites Index listed 588 commercial World Wide Web (WWW) sites at the end of September 1994. Eight months later, the index listed more than 6,000, an average monthly growth rate of 34%. Even if growth slows considerably—and it shows signs of doing just the opposite—well over 30,000 commercial Web sites will exist before the end of 1995. In terms of dollar sales volume ActivMedia, an excellent source of Web marketing information, reports that fewer than half a billion dollars in revenues were generated on the WWW during 1995. However, that was a growth rate of more than 2100% over 1994. A similar growth rate would bring Web sales to over $8 billion in 1996.
ActivMedia also suggests that even if a company decides to wait before beginning to market online, they should now begin to increase their internal use of online technologies and plan for the inevitable day when many of their sales and customer service processes will need to be online to remain in the game. An example of such a transition is that one can use the Internet to locate and order copies of over 10,000 paper catalogs.
Companies not evolving their marketing approaches and that do not know what their competitors are doing online are in danger, like the "Mall of America" and the Brontosaurus, of becoming extinct. Even Walmart, while enjoying tremendously current success in the brick-and-mortar storefront business while literally wiping out Mom-and-Pop stores across America's heartland, is hedging its bets. Shouldn't you?
Finally, if you found me harshly pessimistic about the chances for the "Mall of America," there is a lifeline available to its shopkeepers. They don't have the resources of Bill Gates or Sam's Club, but they, too, see that the future has arrived and are beginning to reach out from the confines of their physical walls...out onto the WWW and its world of customers. Plug "Mall of America" into your favorite search engine and you will find them out there, probing, hoping, evolving and, most of all, preparing for the marketplace of the 21st Century!!