E-Commerce Forum

Profits in Sky

Turning Browsers Into Buyers

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This was published in U.S. 1 Newspaper on November 11, 1998.

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E-Commerce: Smart Options

Though security at an ATM machine means keeping your

PIN code secret, someday soon the ATM will recognize your thumbprint

or the look of your eyeball. Security on the Internet now means using

a password, but eventually you will be able to use a "smart

card"

now under development at Bellcore.

So says William J. Barr, executive director of information

networking

at Bellcore in Morristown and founder of the Smart Card Forum. Barr

is in charge of Bellcore’s security research, particularly for smart

cards for a consortium of automobile manufacturers. He will discuss

mission critical applications and the role that both Internet

technology

and smart cards will play at an E-Commerce Forum on Monday, November

16, at 4:45 p.m. at the New Brunswick Hyatt. The conference continues

on Tuesday, November 17. For $1,095 reservations for the two-day

conference

and trade show, call 888-WIREDIN or 732-933-9473.

Barr graduated from Allegheny College in 1970 and has a graduate

degree

from the University of Illinois. He joined Bellcore at the time of

the first AT&T divestiture in 1984; he was chief software architect

responsible for developing Information Networking Architecture and

the OSCA architecture. As founder and now president of the Smart Card

Forum, he co-edited "Smart Cards: Seizing Strategic Business

Opportunities,"

published by McGraw Hill, and there will be a book-signing opportunity

at the expo from 5:30 to 6 p.m.

"Bill Gates has indicated for two years that smart cards are a

key to creating a secure environment for E-commerce," says Barr,

referring to Microsoft’s just-revealed entry into the smart card

field.

Smart cards can be used to store value (as in the recent failed retail

experiment on New York’s Upper West Side) and/or to authenticate and

identify the user (Barr’s purpose). "We will work with our

clients,

an automotive industry action group, to create secure environments

for their E-commerce environment."

On the marketplace now are smart card readers available

on a floppy disk reader or from a port on the back of a computer,

but the favorite method will probably be what Hewlett Packard has

now — keyboards with smart card slots.

"We certainly think we are the leader in providing a secure

business

environment," says Bellcore’s Barr. "The Internet technology

was not originally designed for secure high performance environment,

but for easy universal access."

"Generally we have to create virtual private internets with

performance

characteristics needed for these critical applications, but moving

Just-in-Time order systems from private line EDI networks will save

automakers a billion dollars a year." Even more important, getting

large companies onto an Internet-based network enables applications

that will have two principal advantages:

1. Strongly tighten supply chains.

2. Provide improved customer intimacy between clients and

providers.

"Initially these systems are for big players but there are

lots of big players. The insurance and banking industries have enough

scope and breadth of applications that this becomes a very desirable

thing, and we are working with the entertainment industry," he

says.

"For business to business E-commerce, we will use this technology

to authenticate your trading partners. In the consumer world, we see

increasing applications in home banking and discount stock

brokerages,"

says Barr. "Wells Fargo is issuing smart cards to their home

customers.

You don’t need smart cards to buy books on the Internet, but to move

money requires a little more security."

Having strong security opens up opportunities to provide

infrastructure

services to network participants who need everything from directory

services and messaging services, to a whole new area — measurement

tools, to measure performance in real time.

Eight banks, for instance, have announced they will offer digital

certificates, electronic identifiers for corporate customers that

can authenticate an individual over an Internet connection.

"Instead

of using a Personal Identification Number, you would store a thumb

print on the smart card. If you are trying to insure that the person

who placed the order for a million tons of steel, or who issued a

command to move $100 million from Chase to Citibank, you really want

a strong form of identification."

Smart cards would definitely alleviate the problem referred to in

the New Yorker cartoon, which showed two dogs in front of a computer.

One says to the other: "The neat thing about the Internet is that

nobody knows you’re a dog."

— Barbara Fox

Top Of Page
E-Commerce Forum

Electronic commerce has been on the minds and in the

strategies of business leaders for more than two years now, says

Audrey

Curtis, development vice president for AT&T Lab’s internet

applications

services laboratory. "Network technology is evolving at a

breakneck

pace to keep up with the demands of businesses craving reliability,

scalability, and flexibility from their networks. We’ve all watched

as electronic commerce has become the central strategic thrust of

modern businesses."

Curtis joins Barr in the E-Commerce Forum that is so loaded with

notables

that six speakers daily are labeled keynoters. On Monday Curtis will

discuss "Networked Commerce: E-Commerce for Today’s

Enterprises."

"We will explore the issues facing businesses as they use

networking

technology to improve their reach to their customers and expand their

enterprises," she says.

On Sunday, November 15, before the forum opens, Mike Baker of

the Electronic Commerce Resource Center at the University of Scranton

will teach two half-day workshops on Electronic Data Interchange.

Cost: $175. Scranton’s ERC is one of 16 in the country, and it has

a $2 million contract to evangelize the territory from Maine to

Pennsylvania

to help small and medium-sized businesses get "electronic commerce

capable" and do business with the federal government.

Monday’s topics include "The Global Politics of Electronic

Commerce,"

by James A. R. Johnson of Global Information Infrastructure

Commission. "The Bill is Your Brand: Don’t Let Your Customer Get

Disconnected Paying Your Bill on the Internet," is the topic for

Richard K. Crone of CyberCash Inc. Alex Bangash and

Karen

Peterson of Lucent Technologies, plus Lisa Henriott of

Manugistics

Group will address "The Vision of Supply Chain Management,"

along with representatives from i@, SAP, and Oracle.

Victor Nappe will present an Apple Computer case study, and

Irfan Ahmed of Withum Smith & Brown will discuss security

issues.

Baker weighs in on Monday with "E-Commerce and Supply Chain

Management

Case Studies: Harley Davidson and the Defense Logistics Agency."

On Tuesday, November 17, "Information Imperative," Richard

L. Moore, global vice president of Lucent Direct, will speak on

"The Information Imperative." Paul Christy, deputy

director

of the commerce department, STAT-USA. will offer an update on the

administration’s E-commerce initiative.

Also "Securing Electronic Commerce," by Warwick Ford

of Advanced Technology VeriSign Inc.; "Intellectual Property and

E-Commerce: What You Should Know About the Law," by Pamela

L. Banner of Banner, Witkoff Ltd.; "Electronic Commerce and

Its Effects on the Publishing Industry," by Mimi Jett of

Interactive Composition Corporation and Robert S. Sutor,

manager,

Interactive Scientific Publishing, IBM.

"Securing a Competitive Advantage with Electronic Payments,"

is the topic for Roger Trout of Sterling Commerce. Steve

Vardy of Snickelways Interactive will discuss "The Buy Button:

Designing for E-Commerce," and Ron Parsons of Strategies

Portfolio Commerce Net will talk about standards in E-Commerce.

Top Of Page
Profits in Sky

Listen up to Robert M. Worsley if you want to

succeed in electronic commerce. He founded the spectacularly

successful

"catalog in the sky" Skymall Inc., the Phoenix, Arizona-based

catalog you find in your seat when you fly almost any airline

(602-254-9777;

http://www.skymall.com). He speaks at the E-Commerce forum

on Monday and Tuesday, November 16 and 17, at the New Brunswick Hyatt.

(See story above).

"I hope to drive home that some very key technology decisions

have been made in our business," says Worsley, "and that in the

next 12 to 24 months, every business will have to ask themselves three

questions:"

1. Are we even going to play on the Internet? Your answer

can certainly be no, he says. "You could say I am going to wait

and maybe get involved in a year or two." But if your answer is yes,

ask:

2. Are we going to integrate our web activities and our web

systems with our legacy systems?

3. Or shall we build an Internet infrastructure and system

and bag the legacy systems.

Saying yes to Question 2, Worsley says, is like putting cement

on your feet while you do a "value-waste activity." You will

be spending lots of money over the next 12 to 18 months to integrate

your old systems and become Y2K compliant.

"We spent over $1.5 million converting our entire system to a

webcentric system," says Worsley. He abandoned a clientserver

system with a Sybase Powerbuilder application. "Instead of trying

to make the Internet talk to that one, we said, `Let’s have the

Internet

talk to the Internet.’"

This week Skymall operators are taking orders at the call center and

keying right into the Internet. Home shoppers can key into the same

Internet and, as with UPS and FedEx, they will be able to track their

shipments.

To overcome the Internet’s proverbial slowness, Skymall uses an

intranet

for its telemarketers, but the same engine, Microsoft Siteserver 3.0,

runs both the intranet and the Internet. Servers are colocated at

an outside backup vendor, Global Frontier, in Phoenix.

Worsley claims his firm is the first catalog company to do this and

indeed it was the first to contact Microsoft for that purpose. Most

catalog companies still are thinking of the Internet as a potential

focus. Very few have said "Everything we do is webcentric."

Is he making money? Yes, though profits are way down because of

technology

outlays. The business plan is for the catalog companies to sacrifice

their margins in order to snag airline customer information. "They

want those customers’ names to market to them later," says

Worsley,

"and they are willing to let us make the money on this sale. It

is a more cost effective way to get catalog shopping dollars, because

what we pay the airlines (7.5 percent commission on sales) is cheaper

than what the postal service is paid."

To place items in his catalog costs $5,000 per month for a quarter

page for all airlines, and customized catalogs for different national

airlines are available. Pass-along readership is significant. From

20 to 30 customers see each copy, and there is a three to four percent

response rate per copy, even though only one in 800 passengers

actually

places an order.

Though Worsley negotiates exclusive coverage with the airlines,

competition

comes from in-flight magazines and duty-free shopping on international

flights. He hosts an annual bash in Phoenix for the airlines

promotions

managers. "We bring in the people we work with and we treat them

really good for three days," says Worsley.

The son of a CPA, Worsley is a Mormon; he was one of seven children,

and he and his wife have six children. After Brigham Young, Class

of ’80, he worked as a CPA for Price Waterhouse until he chanced upon

a lackluster version of an airline catalog. Now he partners with the

company that produced that catalog. "We took a two-cent per

passenger

business and turned it into 12 cents."

The company went public in December, 1996 (Nasdaq: SKYM) but the stock

plummeted because it "missed its numbers." He expects the

stock to recover soon; it is trading at 10 times earnings.

Of 250 employees, 200 are telemarketers, and he has weekly breakfasts

with them, 10 at a time. "As I look into the eyes of these people,

mostly women, I see teenage moms with one or two children, never

married,

trying to make something out of their life with these children. I

want to create a situation where they can come and learn the job and

actually work from home and telecommute, to make the call center a

university where they graduate to home. If you have a quiet room,

you can be just as friendly as in a big call center. I have a work

force I would like to assist in their difficult jobs of being parents.

In our church, families are everything."

Top Of Page
Turning Browsers Into Buyers

Studies show that out of every 100 customers who start

a shopping basket online, only two-thirds of them complete the sale.

Research also shows that people want more human contact. Conclusion:

better customer service is needed to turn browsers into buyers.

Technology

New Jersey will address this in a seminar on electronic commerce on

Tuesday, November 17, at 8 a.m. at the Hyatt. Cost: $30. Call

609-419-4444.

Kate Doyle, director of marketing communications of Business

Evolution, 305 College Road, will be talking about "Web Customer

Service: The Missing Link in E-Commerce Equations." She will

discuss

the four channels — E-mail, live messaging, chat, and telephone

call back — companies are using to communicate with customers

and also how Business Evolution teamed up with IBM to provide a total

customer solution. Formerly an analyst at Jupiter Communications,

a New York research firm, Doyle has written research reports about

developing business models on the Internet.

"Electronic Commerce — Why Start Now?" will be the topic

covered by Mike Jefferson, IBM’s northeastern E-Commerce sales

manager. The electronic commerce market is predicted to be over $300

billion shortly after the turn of the century.

Future workshops will be on first and third Tuesdays and Thursdays.

Compaq and Trintech will discuss security on Tuesday, December 1,

and Grace Polhemus, director of Technology New Jersey, hopes

to present a holiday-related E-commerce business on Thursday, December

15. In the new year the seminars will get down to the nitty-gritty

of telecommunications technology, all you ever wanted to know (or

more) about such things as ADSL and ATM: Asymmetric Digital Subscriber

Loops and Asynchronous Transfer Mode.


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