Tuesday, February 6, 2001

1/4th of Small Businesses Use the Internet for Support

Local businesses continue to seek new ways to capitalize on the Internet, despite the large number of dot-com companies falling off the radar screen. According to the latest wave of the Local Commerce Monitor from The Kelsey Group, the global authority on local and personalized commerce intelligence, and ConStat, Inc., the leading technology-focused market research firm, one quarter (25%) of all small businesses are now using the Internet to provide service and support functions to their customers.

The Local Commerce Monitor findings indicate that small businesses are integrating Internet and e-commerce technologies with their offline operations in order to streamline customer interactions. In fact, ten percent (10%) of all small businesses now report using e-mail marketing as a promotional tool.

"What we're now seeing is that because small businesses are being encouraged to conduct business with their suppliers online and over the Internet, they're realizing they can use the same technologies and applications to interact with their customers," said Neal Polachek, senior vice president of research and consulting at The Kelsey Group. "Most small businesses don't have the technical skill or time to fiddle around with complicated solutions. As the applications become simpler, we can expect to see increasingly higher rates of penetration."

"While e-commerce retains the spotlight as far as Internet-related business operations, it's clear that the larger goal of most small businesses is to leverage the Internet to enhance operational efficiencies rather than to simply grow revenues," said Mike Hesser, vice president of ConStat, Inc.

The Local Commerce Monitor is an ongoing study of 600 small businesses that tracks how local businesses are using local media-traditional and interactive- to acquire customers, manage customer relationships and interact with suppliers.

Smart Chemical Firms Will Refocus Net Activity
As eCommerce becomes commonplace, smart chemical firms will refocus their Net activity on product development. According to a new Report from Forrester Research, Inc., leading chemical firms will implement a process Forrester calls "adaptive development" -- using the Net to craft formulations and services tailored to meet customers' specific application needs.

Since chemical makers operate in a highly competitive environment, leading firms are looking to the Net for simple cost cuts and efficiency gains. These plans are pushing firms to move sales to the Web and build online customer support tools. However, as slower-moving firms erode early performance advantages, leaders will look for new ways to use technology to stay ahead.

"Moving basic commerce functions online makes sense for chemical firms -- it will improve operating performance and help firms outpace their offline competitors," according to Steven J. Kafka, senior analyst at Forrester. "But during the next 12 months, these eCommerce activities will become standard practice among chemical manufactures. As early eCommerce advantages fade, the leading firms will revamp the way they bring new products to market and embrace adaptive development."

As firms focus their eBusiness efforts on new products, they will uncover new ways to satisfy customers. This wave of discovery will give rise to adaptive development. In this fresh environment, chemical firms will focus on solving customers' problems rather than creating new products. Instead of requiring customers to select products from simple catalogs, chemical makers will reformulate their core products to meet each customer's specific needs.

Today, sales reps spend countless hours identifying products that match customers' nebulous requirements. To cut time and resources out of this process, chemical firms will offer online design tools that facilitate product selection. And when off-the-shelf formulations don't do the trick, customers will be able to work with the manufacturer's technical design staff through streamlined development portals.

Chemical firms will also use the Net to collaborate with highly specialized partners. When customer demands require an entirely new product, developing the basic science can take an enormous amount of time. Rather than building every new technology from scratch, manufacturers will contract with design firms for their coating expertise or plug in to intellectual property exchanges to find an existing patent to license.

News Tidbits (appears every day on the front page)
- AllAdvantage has closed its doors. The "Get Paid to Surf" company officially went out of business February 1, stating, "We are sad to report that the major changes in the marketplace that occurred during the last year now require that we close the AllAdvantage Viewbar and our pay-to-surf, sweepstakes and other incentive programs."

Return to February 2001 News Archive