Simon Caulkin
The corporate website was a novelty a couple of years ago. Now it is just another part of doing business. About 90% of the biggest European companies and almost all large American ones now have a presence on the World Wide Web, and the phenomenon is quickly embracing smaller firms. Setting up a large corporate site that includes e-commerce can easily run into millions and a further R5-million a year for maintenance and development, experts say.
Yet sceptics believe the benefits to companies and consumers from this cyber-building site – itself estimated to be worth R6-trillion early in the next decade – are too few. Too many companies put up sites without knowing what they are for, says David Bowen, editor of Net Profit, an electronic newsletter at that surveys sites and rates them entertainingly. “A pointless site done well won’t do much good, but a bad one does harm,” says Bowen.
Net Profit singled out “cyber-turkeys” – Toshiba United Kingdom and Ireland (“what’s the point?”), Saatchi & Saatchi Business Communications (“catastrophic”) and Credit Suisse (“a medieval castle with the drawbridge up”). Good sites involve purpose and execution, not necessarily sexy subject matter. For instance, Net Profit’s top ratings include investment trust 3I and EmuNet (about the euro).
“Companies have to have a clear reason for building a website,” says Bowen. Recruitment may be one: the first thing an interested graduate does is look at a firm’s Web pages. Another is investor relations. Firms can make their communications more timely and save thousands by putting annual reports on the Web.
Bad websites waste money. In a report entitled Why Most Websites Fail, the research group Forrester, at , says: “The majority are painful to use.” Surveying 25 sites, it found that most provided inadequate information, were hard to use and failed basic reliability tests.
These failings could “mortally wound” companies’ Internet efforts, Forrester says, costing millions in wasted Web expense, forfeited revenues and lost customers. Such failures “create a strong negative impression about these sites and, by extension, their brand”.
According to Forrester, 75% of leading United States companies’ websites need major work. A further 10%, it says, require complete reconstruction, costing up to R9-million.
Perhaps nowhere is the gap between hype and reality more glaring than in e-commerce. Forecasts for Internet sales are revised upwards nearly every week – latest figures from Forrester suggest R19-trillion by 2003, or 5% of all global sales. But some analysts believe these figures may turn out to be a mirage – and far from promising a dazzling future, the Internet may bring a jolting shake-out in retail sites sooner rather than later.
In a report called Click-Here Commerce, Shelley Taylor Associates, at , complains that “even the most successful commercial sites fail to translate the lessons learned from centuries of land-based retailing” into their online shops.
Taylor says: “We are forced to ask who is actually minding the shop. Does anyone in the boardrooms of virtual stores [without land-based counterparts] have significant retail experience to actually guide site development? Or does anyone in the boardroom of land-based stores that have online shops have the Web expertise to guide the translation of retail knowledge and experience into site design?”
For her, one of the most disappointing aspects is that most sites are driven by technology rather than customers’ needs. This is more serious than the firms realise: by requiring website visitors to have the latest browser version or plug-in extras to run animations or sophisticated graphics, they are erecting roadblocks for consumers. “What land-based store would continue to exist if a guard stood at the door and only allowed admission to customers with a particular brand of shoes?” she asks.
She believes the Internet will see a shake-out over the next two years. Three-quarters of potential shoppers now check out the goods online without buying. Once the novelty has worn off, why would they return to stores that are harder to shop in than those in the high street?
The losers, Taylor believes, may include even some big online names. She reckons that the “over-inflated” forecasts for e-commerce fail to take all the difficulties into account. Their loose definitions include firms that don’t actually do transactions online, and the totals don’t allow for customers becoming more discerning.