E-Commerce: Is it for Real? and Who’s Buying?
Internet Shopping: Brave New World
Corrections or additions?
These stories by Phyllis Maguire and Barbara Fox were published in
U.S. 1 Newspaper on May 27, 1998. All rights reserved.
Survival Guide
Top Of PageE-Commerce: Is it for Real? and Who’s Buying?
Last year online sales topped $2 billion, and while
some experts expect that figure to double in 1998, others think it
just might triple. Although only 7 percent of the American population
has purchased items online, the Internet is transforming the ways
in which we shop. Here is the conclusion reached in “Internet
Shopping: An Ernst & Young Report,” a survey of more than 850
consumers and 150 retailers and manufacturers
(https://www.ey.com/consumer/shopping):
“Slowly but surely, the Internet is changing consumer shopping
patterns.”
So who IS buying online? According to the report, he — and it
is a “he” 68 percent of the time — is well-educated, with
26 percent of online purchasers holding post graduate degrees. He
is well-paid; over half earn between $50,000 and $100,000. And he
is middle-aged: 64 percent of online buyers are between the ages of
40 and 64, an avid moviegoer who enjoys gardening, travel, and gourmet
cooking. He uses the Internet to purchase computer-related products
(they account for 40 percent of all online sales), books, travel
accommodations,
clothing, music, subscriptions, and investments.
He appreciates the Internet for its convenience, and is more likely
than average consumers to shop in nontraditional channels, via mail
order or telephone. And although he is likely to buy only two to four
online items every year, he has helped transform the Web into a
powerful
retail tool. Two-thirds of surveyed consumers use the Web to research
products they go on to buy in retail stores; almost half do product
research on the Web before ordering an item by telephone or fax, while
32 percent combine Web research with an online buy.
The decisive factor in sealing a sale? It’s name recognition:
“Brand
name and retailer familiarity exert the most impact on Web buying
decisions.”
Here are some Ernst & Young E-commerce tips:
Gear your product line to the interests of the onlineaudience.Target more marketing to women who use the Web to buyapparel and magazine subscriptions.Use search functions to narrow product choices. Becauseonline research is such a powerful incentive to in-store sales,”equipsites to aid research and emphasize product value.”Offer “community” through content, links to othersites, and chat rooms.Top Of PageInternet Shopping: Brave New WorldAccording to “Internet Shopping,” 68 percentof people who do NOT buy online are leery of putting their creditcard information out over the Web. The Internet marketing bonanzahas business practices and legal protocols scurrying to catch up totechnological advances.Richard L. Ravin, a partner with the Roseland law firm of Ravin,Sarasohn, Cook, Baumgarten, Tisch & Rosen, is the publisher of the”Internet Business Law Alert.” He outlines four hurdles thatmust be overcome before E-commerce will match its explosive potential:Speed and connectivity. Internet transmissions are stillunreliable, cobbled as they are from a snarl of LAN lines, phoneroutes,and tiers of glitch-filled, crash-prone servers. Until theinfrastructurebecomes more direct and foolproof, Ravin says, “people can’t relyon the Internet as a major delivery route for products.”Digital signatures, which are essential forbusiness-to-businesstransactions. While California and Utah have laws recognizingelectronicsignatures, the business communities in most states still are in ano-man’s land with digital contracts. The state of the art in digitalsignatures is asymmetrical encryption, a software program thatgeneratesboth a public key to send an encrypted message and a private key todecode it. Says Ravin: “The technology is there, but it needsto be standardized and universal.”Cyber notaries, or the lack thereof. E-commerce needssome way of authenticating that messages have been sent and received– and someone to serve as a depository for electronic documents.”You can negotiate a contract back and forth, but if there isno third party with whom the document gets filed, what’s to stopsomeonefrom tampering with your final draft? Without digital signatures andcyber notaries, courts will not enforce electronic contracts.”Secure, reliable methods of electronic payments. Banksand credit card companies are now hammering out Secured ElectronicTransaction (SET) protocols and Electronic Negotiable Instrumentsto permit funds to be wired directly.While these wrinkles are getting ironed out, online merchants mustnavigate a brave new world of established laws with startling newapplications. Intellectual property laws, governing trademarks, tradesecrets, patents, and copyrights, are in play; constitutional issuesof privacy and freedom of the press are raised; and commercial andcontract laws concerning enforceability are crucial, as is tort lawon defamation and misappropriation of business assets. Ravin’ssuggestionsfor posting an online site:Execute a written agreement with any outside websitedesignerto specifically address issues of site ownership and licensing.Conduct a federal trademark search and registration; don’tdevelop a trademark only to find that you’re infringing on someoneelse’s.Restrict access to any trade secrets to persons having a”need to know.”Use passwords and key codes, and encrypt any sensitive data.Require employees and outside consultants to signconfidentialityagreements.And Ravin urges anyone doing business on the Web to think aboutthe year 2000. “Businesses are expecting the Microsofts of theworld to come up with a magic bullet that can be fired into computersystems, but experts say that solution isn’t forthcoming.” Toreceive a copy of “Internet Business Law Alert,” call973-228-9600or E-mail rravin@ravinpc.attmail.com.– Phyllis MaguireTop Of PageWeb BashIf this issue of U.S. 1 doesn’t quench your thirst forthe Internet and related matters, then head Thursday, June 4, to the”New Jersey Works the Web” trade show, networking party, andseminar event from 3 to 9 p.m. at the PNC Bank Arts Center, Holmdel.Billed as a three-ring circus by its host, New Jersey WebGuide(https://www.webguide.com),the event will showcase booths from 35 different New Jersey companiesdesigning for or providing services on the Internet. Seminars include”The ABCs of Putting Your Business Online,” “EffectiveWebsite Marketing and Building Traffic,” “Using the Internetfor Corporate Recruiting and Job Searches,” “Legal Issueson the Internet,” and “Internet Commerce.”The Internet Commerce workshop is being conducted by Toon Six,president of International Customers Solutions Inc. in Danville(973-366-5355, toonsix@intercs.com). Six says the era of widespreadE-commerce is here, thanks to increased payment security: “Sendingyour credit card information over the Web is safer than giving itto a storekeeper or restaurant.” He offers these tips forsuccessfulcommercial sites:Heighten customer interactivity. Make your customers’browsing or search experience an interactive one by asking onlinequestions about product preferences or budget limitations. Not onlywill you guide them to specific services, you’ll build your owndatabaseand provide a sense of personal attention.Establish customer and technical support. If you’resellingany complex product or service, like a software program, you’ll needa caller center where agents can interface with customers and sende-mail to them directly. “Immediacy is a requirement,” Sixsays of E-commerce. “Fifty percent of all calls to a call centerneed real time or instant response.”Top Of PageThe Scam What AmPromoters of bogus business opportunities are usingthe cachet of the Internet to lure unsuspecting consumers. Accordingto the Federal Trade Commission, the same types of fraud that havefloated through the mail and over phone lines have turned high-tech.Beware of pitches promising big bucks selling Internet-relatedproductsor services; when compensation is based on recruitment, instead ofproduct sales, the deal could be a pyramid scheme, not a marketingplan. Avoid any sales offers for kiosks that provide Internet accessfor a fee. The “profitable locations” you are promised tendto be pizza parlors rather than shopping malls or upscale hotels.And don’t believe claims that money can be made on the Web by peoplewith no Internet experience. Scams particularly target those whoaren’ttechnologically savvy. Check out any business opportunity with theNew Jersey Division of Consumer Affairs, 973-504-6200 or 800-242-5846.Another online opportunity to approach cautiously is the cyberauction.Like live auctions, the highest online bidder wins, but that’s wherethe similarity ends. Online auction houses don’t actually have themerchandise being sold, so the buyer must deal directly with thesellerto complete the deal. Beware of sellers who want payment by certifiedcheck or money order; try to pay by credit card or COD instead.For a copy of the FTC’s “Net-Based Business Opportunities: AreSome Flop-portunities?” or “Online Auctions: Going, Going,Gone,” call 202-326-2222. Or check out the website:https://www.ftc.gov.Top Of PageHigh-Tech Higher EdThose conning the computer illiterate will steer clearof the more than 8,000 undergraduate and graduate students at theNew Jersey Institute of Technology in Newark’s University Heights.One of the state’s three public research universities — alongwith Rutgers and the University of Medicine and Dentistry of NewJersey– NJIT recently placed second in the annual ranking of “Yahoo!Internet Life” magazine of America’s 100 most wired colleges,beating out M.I.T. and bested only by Dartmouth.NJIT president Saul K. Fenster speaks at the Princeton Chamberof Commerce lunch Thursday, June 4, at noon at the Forrestal. For$28 reservations call 609-520-1776.Prior to joining NJIT in 1978, Fenster served in various faculty andadministrative capacities at Fairleigh Dickinson University. Amechanicalengineer, he earned an undergraduate degree from City College of NewYork, a masters’ from Columbia University, and a Ph.D. from theUniversityof Michigan.Fenster’s June 4 topic will be “New Jersey Higher Education –Leading the Way in High Technology.” He sees the same changesthat have transformed business affecting higher education.”Informationtechnology is changing the very nature of the educationalprocess,”he says. “The lexicon of higher education already embraces suchconcepts as marketing, price competition, benchmarking, outcomesmeasurements,and economic development. With a cultural convergence taking placebetween higher education and business, the question becomes: willwe be reluctant or willing participants in shaping change?”Top Of PageNew Jersey CAMAThe New Jersey Communications Advertising MarketingAssociation (NJ CAMA) presents its annual New Technology Day onTuesday,June 9, starting with an 8:15 a.m. breakfast buffet and ending atnoon at the Forrestal, College Road East. Cost: $50. Call609-890-9207.Featuring new media guest speakers and selected exhibitors, theconferencewill address Internet commerce and security, online media buying anddevelopment, and E-marketing and website design. Stephanie Arditoof Ardito Information & Research Inc. will speak on findinginformationon the Web; Gary Wienof the Early Edition/FindNJ.com willdiscussusing the Internet for visibility and cost effective advertising,and Bonnie Schwartzof BizTravel.com will discuss E-commerce,with strategies of how to build brands online.”The most important elements to building a brand online areestablishinga product relevancy and a target audience,” says Schwartz, seniorvice president of the firm. “You must be able to speak to thataudience in both online and offline ways, using a variety of media– direct marketing, traditional advertising, and new media –to build familiarity.”This organization also solicits advertisers for its membershipdirectory.Costs range from $50 for a business card or quarter page ad to a fullpage at $100. Camera-ready ads must be mailed no later than May 29.Call Susan Tibbetts at the Red Flannel Design Group at PrincetonMeadows Office Center, 609-275-4501, for information.Top Of PageComputer-Phobic?Getting WiredIf you can’t quite stomach the prospect of E-commerce,try “Eliminating Your Fear of Your Computer” at next month’sBusiness Over Breakfast meeting, sponsored by the Middlesex CountyRegional Chamber of Commerce at the Ramada Inn in East Brunswick,Wednesday, June 10, at 8 a.m. For $25 reservations call 732-821-1700.Four panelists will each take one facet of the computer’s domain –hardware, software, consulting, and the Internet — and make itmore palatable.Jeff Clark, a partner with NetCounty Communications, a websitedesigner and host in East Brunswick, will discuss the Internet.”Therestill aren’t many small to medium-sized companies that use theInternetfor commerce,” Clark says. “But they need Internet presencejust for credibility. Customers use the Web for informationalpurposes,checking out what services a company offers without having to dealwith a salesperson. Companies without a site are being screened outby prospective customers.”Nancy Ostin, Chamber of Commerce executive director, says 44percent of businesses in Middlesex County have fewer than 50employees,and that small businesses in particular struggle to secure a site.”They don’t have MIS departments to manage Internet access,”says Ostin. “Small businessowners are so busy running a companythey can’t research different providers or shop around for the bestprice.”Too often, she says, small businesses adopt an `all or nothing’attitudeto the Internet; if they can’t create a monster site, they’ll foregoone entirely. “We’re hoping the Business for Breakfastpresentation”– which draws up to 50 attendees — “will convince themsome presence is better for their business than none at all.”The Middlesex Chamber of Commerce is itself getting wired, its siteat https://www.mcrcc.org is scheduled to launch July 1. Thehomepagewill offer business information, like classifieds and a members’bulletinboard, as well as a solution to the small businessperson’s Internetdilemma: homepage space available to members and hot links to theirbusiness sites.Top Of PageThe Year 2000Year 2000 issues will be centerstage at the “NewJersey & Year 2000: Perfect Together?” conference being held atthe Hilton in East Brunswick, June 11, starting at 8 a.m. Hosted byCarnegie Center-based Technology New Jersey Inc., the conference willbring together business and government heavyhitters from around thestate. Irene Dec, vice president of Prudential Insurance, willkick off the conference with a keynote address entitled “Year2000 Global Business Impacts,” the first of 10 presentations heldthroughout the day.Topics will focus on the economic and legal implications of theimpendingdate change, and will include “Year 2000…Are We Already TooLate?” and “Year 2000 + Small Business = Big Losses?”Speakers include representatives from the governor’s office and thestate Office of Telecommunications and Information Systems, PSE&G,Bellcore, IBM, Merrill Lynch, and the NJ Small Business DevelopmentCenter. For more information, visit https://www.technologynj.org.For registration at $100, call 609-419-4444.Top Of PageSeeking an AngelLearn how to find your “angel” at the New JerseyEntrepreneurial Network on Wednesday, June 3, at noon at theForrestal.Call 609-279-0010 for $30 reservations.John May of New Century Partners, based in Vienna, Virginia,and Lennart Haggard of Philadelphia-based American Maple LeafFinancial Corporation share a panel entitled “Touched by an Angel– finding the Right Private Investor.”The “guest angels” will answer these questions:Why seek private investment?How does a company find private investors? What role isplayed by groups like the Pennsylvania Private Investment Group andthe Private Investors Network in Washington, D.C.?What are the basic screening criteria for privateinvestors.They will present case studies of a successful privateinvestment,and each will be joined by an entrepreneur who has received an angelinvestment.Top Of PageAmazing MindsUniversities are giving out more than diplomas in thecoming week. Two upcoming seminars offer top-notch speakers and areabsolutely free: the “Amazing Human Mind” conference onFriday,May 29, at 4:30 p.m. at Princeton University’s Richardson Auditorium,and a New Jersey/Israel biotechnology conference on Wednesday andThursday, June 3 and 4, at 9 a.m., at a Rutgers center at 679 HoesLane, Piscataway.”Biotechnology Prospects: a New Jersey/Israel Meeting,” issponsored by the New Jersey Commission on Science and Technology alongwith the Rutgers Center for Advanced Biotechnology and Medicine, theNew Jersey Center for Biomaterials and Medical Devices, and theBiotechnologyCenter for Agriculture and the Environment. For free registration,call 732-235-5310.Speakers include professors from Rutgers, Hebrew University, Tel AvivUniversity, Ben-Gurion University, Weizmann Institute, and Technion.Among the topics to be discussed are combinatorial approaches beyondpharmaceuticals, value of point-of-care rapid diagnosis, using livingcells as biosensors, tailoring biomedical polymer surfaces, and useof plant roots for environmental remediation and biochemicalmanufacturing.One of the series of Reunions weekend lectures, the May 29 event atPrinceton University features seven presentations of cutting-edgeinformation exploring principal aspects of the human mind. It willbe followed by open audience comment and discussion.Thomas W. Lanfitt, neuroscientist, senior fellow at Wharton,and author will be moderator. Presenters include Lee M. Silver,Princeton professor of molecular biology and author; Jonathan D.Cohen, Princeton psychology professor; Clarence E. Schutt,Princeton chemistry professor; Patricia S. Churchland,philosophyprofessor, University of California at San Diego and author; andJohnJ. Hopfiled, Princeton molecular biology professor.Also Leslie A. Brothers, psychiatry professor, University ofCalifornia at Los Angeles School of Medicine; and Dennis J.Selkoe,neurology and neuroscience professor, Harvard Medical School. ThePrinceton University seminar is sponsored by the Class of 1943 andis free. Call 609-258-5748 for information.Top Of PageIn the Running:ALK & CaliperTwo entrepreneurial businesses in Princeton — ALKAssociates and Caliper Human Strategies — are represented amongthe finalists for the Entrepreneur of the Year awards, to be announcedat a dinner on Thursday, June 25, at 5:30 p.m., at the BrunswickHilton.For $110 tickets call 201-836-2485.Alain and Katherine Kornhauser of ALK Associates on HerrontownRoad and Herbert M. Greenberg of Caliper on Mount Lucas areamong the two dozen statewide finalists. Founded in 1961 the125-personCaliper Inc. does employment and management tests and team buildingtraining. Founded in 1979, the 100-employee ALK Associates developsdecision support systems for the transportation and logisticsindustriesand also develops computer mapping and navigation software forconsumerand commercial applications.The contest program’s independent panel of judges bases its selectionon innovation, creativity, leadership, and a strong corporate culturethat motivates and supports employees. The judges include one of lastyear’s winners, Martin Levine, president and CEO of MarketSourceCorporation. Other judges from this area were Caren Franzini, executivedirector, NJEDA, and James Millar, partner of Early StageEnterprises.The Ernst & Young Entrepreneur of the Year Award has been recognizingsuccess stories for 12 years and is considered to be the highest honoran American entrepreneur can receive. Area sponsors of the awardprogramare Building America Television, Chase Manhattan Bank, and LowensteinSandler while national sponsors are USA Today, the Ewing MarionKauffmanFoundation, and NASDAQ.Greenberg is an original founder of Caliper, which has offices ineight countries. It has assessed the personality qualities of morethan one million individuals and has consulted with more than 23,000companies on hiring and firing decisions. Among its clients are Avis,Borg-Warner, Canada Life, City of Stockholm, Holland Chemical, theLos Angeles Lakers, the New York Mets, Waste Management, and YaleEurope.Greenberg is expanding into three entrepreneurial areas: individualcareer coaching, training and development for team performance, andorganizational development to help groups align their people withtheir visions. He recently bought a Continental Basketball Associationteam for New Jersey, to play in the arena being constructed inTrenton.Alain and Katherine Kornhauser co-founded their firm;Alain is also a professor of civil engineering at Princeton Universityand director of the university’s transportation program.The first of ALK Associates’ three divisions, the TravRoute division,creates mapping and GPS-linked in-car navigation systems for consumersand “mobile professionals” such as outside salespersons,repairpersonnel, and delivery staff. Its products received “Best ofShowcase” in the Mobile Electronics/Mobile Office category atthe 1998 International Consumer Electronics Show.The PC*MILER division provides a wide range of routing, mileage, andmapping software including customized routing preferences, fuel taxprograms, and other fleet optimization software tools for the truckingand rail industries. It was recently chosen as the U.S. Departmentof Defense’s official worldwide distance guide and is being used bymore than 10,000 global companies.Next StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
