This Week's News
Online Commerce Needs a Human Touch
In Some hidden risks of Internet commerce, we described the surprises in store for small companies taking credit card orders over the Internet, mostly in the area of the contract consumers have signed with their merchant bank. But as many are finding out, there are other surprises and challenges, so we'll outline some alternatives. One has yet to fulfill its promise, and the other is an innovative that brings back the human touch. For engineering companies, the latter also reduces the cross-channel conflict presented by many OEM Web sites that compete with their distributors.
For a couple of years now, online merchants have been taking cybercash (a.k.a., digital money) instead of credit cards and are having it administered by virtual banks such as First Virtual Holdings Inc. Cybercash is techie-talk for a prepaid debit card. To use cybercash, a cybernaut provides his or her credit card number to a company like First Virtual, often over a conventional voice-grade telephone line. A cybernauts who authorizes $100, for example, against his credit card is given a code, and can go to authorized online vendors who will debit their cybercash account. First Virtual gets its cut.
Online vendors should consider accepting cybercash, since it is not expensive to set up nor to administer. But it has not become the Web's mainstay of e-commerce for two reasons:
To expand the available solutions, merchants may wish to revisit what customers and vendors gain by using the Internet for online commerce. Customers can learn all the facts, compare vendors, see pictures of products, ask presale questions via e-mail after dinner, and type their order to make sure their address is spelled correctly. Vendors can slash their cost of sales by presenting online information about their products or capabilities 24 hours a day to potentially millions of customers.
How much of that value does a shopper compromise if the vendor calls back on a secure voice line to take his credit card number after he's place an Internet order, or Internet requisition? If your Internet presence allowed your customer to better understand his needs, or to realize that your company provides the right products or services, and to decide which product or service was the best fit, would you say you accomplished most of the mission?
If returning the human element to online shopping is acceptable to those merchants who had hoped the Internet could provide a money machine on autopilot, there are ways to automate the human element. Order-fulfillment houses have been around longer than the Internet, and they have a solid track record automating that human element. They provide 800 numbers where customers can place conventional orders 24 hours a day. They process credit card transactions on behalf of the merchants who are their customers, and then transmit the verified orders to the merchants to ship the product.
Internet-enabling your neighborhood order-fulfillment house is fairly straightforward, and some are taking the initiative themselves. They already have computers with order-entry software and other productivity tools. If the online merchant's Web site includes online order forms that do everything except request a credit card number, the e-mail messages produced by such forms can be displayed on an order clerk's terminal or parse directly into the merchant's order-entry software. An autodialer can call shoppers seconds after they press the "Submit" button.
"We can confirm the order, get a credit card number, and be gone in under 60 seconds," said Catherine Collier of AllPro TeleComm (Anaheim, Calif.), an order fulfillment house that takes Internet-enabled orders. "Customers rarely see that as an inconvenience."
And there are other 'human touch' benefits that "shouldn't be underestimated," Collier said. These benefits fall into several categories:
Should all this lead to caution regarding online commerce? Perhaps, but don't let the bus leave without you. Consider a recent Internet shopping report released by Ernst & Young, which concluded that 32 percent of consumers with online access buy products over the Internet, but only 4 percent make more than 10 online purchases a year. A full 64 percent research products online and then buy them through traditional channels.
The key is to recognize that such traditional channels involve humans, and that if something works, Webmasters should ask, "Am I doing away with humans merely because I am technically gifted enough to do so?"
Our conclusion is that online credit card transactions are sure to grow, but small businesses should consider a trade-off and perhaps a migration, not a headlong charge into taking credit cards online. The focus of an online marketing machine should be to quickly present the compelling benefits of products and services and to allow Web site visitors several simple and trustworthy entry points into your sales channel, including through humans.
EE Times Online provides a number of helpful services for our readers and advertisers. The EE Times Network is a portfolio that includes an editorial calendar, a media kit and a list of trade shows and conferences.