What a difference a year makes. … Or then again, maybe not.
Last year at this time we were in the midst of one of the greatest new business booms of modern times. Start-up companies, most of them in Internet content delivery or e-commerce, were getting funded and bursting on the scene by the dozens per week. Their overheads were so low and their capitalization so high that they had the money to flood every media channel, from Super Bowl ads to driveable billboards, with their promotions.
The stock markets were setting new records daily, young people from all over the world were flooding into San Francisco as if it was 1849 redux, and everybody was a business genius.
We all know what happened next. Or do we? The high technology guru George Gilder and I have had a long-standing debate. He has always argued that victory goes to the innovators. I’ve always disagreed, arguing that the inventors are almost always overtaken by superior marketers.
The last year, I think, has shown us both to be wrong.
Solid Sites Reap Victory
Among the top surviving firms created in the last two years, none can really be characterized as pioneers. So much for Gilder’s argument. As for mine: We have just endured the biggest branding blitz of all time, … and the only thing we remember is the stupid sock puppet of a soon-to-be-dead company. So much for the triumph of marketing.
So who did win? The top e-commerce (not portal) traffic sites last week, according to Nielsen research, were in order: eBay, Amazon.com, American Greetings, CitySearch/TicketMaster, CDNow, Travelocity, Expedia, EToys, Electronic Arts (EA.com), Barnes&Noble.com, Egreetings, JC Penney.com and Walmart.com.
Toss out the greeting card companies as purely seasonal, and you have a pretty good list of the companies that are likely to emerge from this Christmas at the top of the pile. They are a very interesting mix that no one predicted a year ago: Internet-only newcomers, toy outlets, venerable retailers and a cost-cutting megastore chain.
What do they have in common? Nothing … except perhaps this: All devoted enormous energy and resources to building a community of users, and then cultivating the loyalty of that community through an extensive product line, good customer support and communications, and reliable delivery. In other words, each brought solid business practices to the Web.
Who would have thought that e-commerce success would go not to the outfits with the fastest burn-rates or the coolest offices or the flashiest sites, but to the companies, old and new, that offered a wide array of competitively priced products and delivered them on time.
Good business practices won in the end. How recherche!
E-Commerce Cooks Along
That’s one surprise. Here’s another: Despite all the bad news emanating from the dot-com world over the last few months, not all of the companies are doomed. As just noted, a sudden outbreak of good business practices might save a whole host of them now at the 11th hour. Here’s another piece of unexpected good news: a BizRate survey has found that online sales as of Nov. 20 were up 125 percent over last year — and the pace of growth appears to be accelerating by the week.