Taming the E-Commerce Shrew

News stories about dot-com layoffs and closures have so frequently stormed the business pages that many have become numb to the downside of e-commerce — and have even stopped thinking about what to do about the decline.

We read so much about cash shortages and sluggish sales that news of yet another closing hardly causes a blip on the radar screen.

That’s unfortunate when you consider the thousands of people who lost their jobs when the extravagant, mismanaged dot-coms that they worked for closed up shop.

However, as the shakeout dust begins to settle, and the dot-com whining comes to an end, it is time to ask why novice Web entrepreneurs failed to shift business strategies when it became apparent that things were not working out as planned.

Against All Odds

If the market was saturated with a particular product, for example, what drove merchants to go live with a new Web site that sold that same product almost exclusively?

Further, when presented with questionable business ideas, what convinced venture capitalists that they were viable? The phrase “dot-com” alone?

And if a particular e-tail company was successfully operating with 100 employees, why did a new company of the same ilk feel compelled to open with 200 staffers?

Casualties of War

Don’t be hasty and dismiss these questions as “too little, too late.” In fact, careful examination of strategic oversights among e-tailers is more important now than ever. Not convinced?

Well, ask the 400 human beings who were rendered jobless when Disney’s Go.com shut its doors. That event happened just weeks after the company was still advertising for new workers.

Or question the 75 people who worked for Miadora.com — they lost their jobs en masse. One wonders also about what the 164 dismissed employees of Eve.com or the hundreds of Garden.com jobless might have to say about their respective companies’ business strategies.

Lessons of the Fall

Many of these people, and countless others who were sacrificed at the altar of the faulty dot-com, have mortgages, auto loans and children. Even if they don’t have those trappings, they have rent to pay and food to buy. Since the industry is streamlining and downsizing, many of them have few, if any, decent prospects for re-employment.

Many of these workers were sold a bill of goods from over-enthusiastic dot-com owners whose egos and inflated views of their own business acumen got in the way of commercial success.

If anything, somebody owes each of those displaced people a decent explanation.

Forces of Nature

Chances are that a credible explanation is not forthcoming. Yet, in the interest of the industry reclaiming a semblance of respectability and credibility, now is the time to place new emphasis on the success of electronic commerce.

Office Depot, for example, appears to understand the importance of having a big brother online. Reportedly, the office supply giant will team with none other than Microsoft to encourage small businesses to expand into online commerce.

It’s potentially a win-win situation, as Microsoft gains more users for its technology and more small businesses sign on with Office Depot as their office product supplier.

Street Smarts

Meanwhile, another survivor (so far) of the dot-com shakeout, Kozmo.com, has simply renamed itself “Kozmo” and announced its intention to expand its brick-and-mortar presence.

This is another strategy that may ensure longevity, as the online company realizes the importance of existing in both the online and traditional business worlds.

These are not genius strategies. They are straightforward, common sense approaches to survival in an increasingly challenging economy.

Slow Dance

If there is an essential lesson to be learned from early e-commerce failures, it has much to do with growth rates and capital expenditures. First, all hail the old axiom: “Slow and steady wins the race.”

Instead of rapid, high risk growth, dot-coms need to slow down. Also, business plans must include measurable goals to which the principals strictly adhere.

To do that, somebody has to tighten the purse strings, which is exactly what’s happening right now in the world of IT spending.

Bare Essentials

Within the companies, staffers should be cross-trained. Is it really necessary to pigeonhole each employee into one specific job function? If dot-comers want to be truly progressive, they should tap all available resources from each individual employee.

Cross training often results in increased efficiency company-wide, as well as smaller, streamlined staffs.Does this all sound a bit too fundamental for the New Economy?

Well, too bad. It’s all about reasonable business strategy. Something those in the dot-com graveyard could have used way back at the end of the 20th century.

What do you think? Let’s talk about it.

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Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.


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