NOTHING BUT NET
WHERE’S WAL-MART? The deal struck recently by Sears, Carrefour and Oracle to create a business-to-business marketplace has allied the second-largest American retailer, Sears, with the globe’s second-largest merchant, Carrefour, but for now has left world-leader Wal-Mart sitting on the cyber-sidelines. In a research note assessing the plan to go live this month with the site, GlobalNetXchange, Richard Baum, e-tail analyst at Goldman Sachs, stated the new marketplace probably won’t succeed without participation from Wal-Mart and other key players.
Initially, Sears and Carrefour will funnel their combined $80 billion procurement spending from 50,000 suppliers through the Web site; then global retailers will be invited to use GlobalNetXchange and to take equity positions in the venture.
“We believe Wal-Mart’s response will be crucial,” Baum noted, “as it has been running proprietary [supply chain] systems for years and benefiting from this competitive advantage. Thus, this venture is ultimately an attempt by Sears and Carrefour to overcome the lead Wal-Mart has enjoyed as well as preempt any such moves by Wal-Mart.
He added: “From Wal-Mart’s standpoint, it can be a part of this system, or attempt to create its own industry standard. With more ‘weight’ and ‘clout’ than both Sears and Carrefour, how Wal-Mart reacts to this announcement will help determine how widely accepted GlobalNetXchange will be.”
TALK IS CHEAP: Is the trendy B2B moniker poised to fade from fashion as quickly as the once ubiquitous Y2K acronym? Perhaps. Despite the buzz being stirred by Net firms and financiers that are increasingly focusing on business-to-business concepts, a new nationwide poll of U.S. companies shows the technological revolution has not yet resulted in extensive e-commerce among vendors.
“No one questions the importance of B2B e-commerce, but relatively few are participating in it,” said Jerry Jasinowski, president of the National Association of Manufacturers, in referring to the group’s survey of 2,500 companies, completed Feb. 8.
The study found that 68 percent of respondents are not using e-commerce for business transactions. “While 80 percent claim they have a Web site, the vast majority offer only an information storefront,” Jasinowski reported. “Only 10 percent say their business process technology systems are fully automated.”
In addition, Jasinowski noted, “There is a lack of coherence in terms of who is accountable for B2B e-commerce.” Thirty-five percent said the chief executive officer or senior management personnel are in charge; 22 percent responded that information systems employees have the responsibility; 5 percent cited sales and marketing personnel, and 10 percent admitted no one is overseeing that area.
VIRTUAL FASHION DISTRICT: At least one group of style merchants will be diving into the business-to-business pool with a Web site dubbed e7th.com, slated to open in May. The venue is conceived as a one-stop destination where retailers and vendors can meet, view product and conduct transactions.
Todd Ricci, founder of the Vittorio Ricci footwear brand, is chief executive officer of e7th.com, which is based in New York. Strategic partners in the venture include Harbinger Corp., an e-commerce software supplier; Moai, a provider of auction software, and ConnectInc., which offers technologies and services to connect buyers and sellers online.
SHADES OF SUMMER: Sunglass Hut International recently launched a Web site in Australia, and just in time for the summer Down Under. The new site can be found at sunglasshut.com.au. The company’s distribution center in Sydney is responsible for fulfillment of orders, just as it’s handled the company’s catalog orders in the Australian market.
The eyewear retailer operates Web sites at sunglasshut.com, watchstation.com, and, following their acquisition in January 1999, at shades.com and SwissArmyDepot.com. The acquired sites helped the company increase its e-commerce sales 139 percent, to $485,000, during the third quarter ended last October.
In another development, Sunglass Hut has retained Sapient Corp. to help develop and implement e-commerce strategies and site revisions, the first phases of which are expected to be put into place prior to the Northern Hemisphere’s summer. “We have long had a global strategy as a specialty retailer, and we’re rapidly moving into a global Internet strategy to go with that,” John Watson, president and chief executive of Sunglass Hut, told WWD.
THE BIG SHOW: Internet sports commerce is expected to make it to the majors before long, according to new research from Web watcher Jupiter Communications. The consulting firm is forecasting that in 2003, consumers will spend as much as $3 billion for sporting goods, apparel, footwear and event tickets online. Much of that, Jupiter said, will be incremental revenue for the business players who have stepped up to the plate, because the content used to lure people to sports e-commerce sites shows little signs of vulnerability to cannibalization, at least in the near term.
In a statement, Patrick Keane, senior sports analyst at Jupiter, said: “Leagues, teams and broadcasters securing high-dollar rights fees shouldn’t fear the Internet will cannibalize viewership or affect gate revenue.” Unlike other industries, for sports, he said, the Internet “continues to exist as a complementary channel and medium.”
Keane recommended that players in the sports sector use the Net as a new source of income. Jupiter projected that only one-third of the $3 billion sports e-commerce market anticipated for 2003 will represent ticket purchases, leaving plenty of opportunity to gain yardage with sales of licensed apparel and other sports-related clothing.
BROADCAST E-NEWS: Internet players nearly quintupled their radio advertising in the New York metropolitan market during 1999, jumping to the number-two category overall. New York Market Radio has reported Internet businesses spent $64.1 million to air their messages last year, a 393 percent surge over 1998 levels. While still trailing the biggest spenders — automotive companies — by $14.2 million for the year, Internet companies led all categories during December, when their $8.8 million in radio ad spending was up 464 percent over a year ago.
Internet companies were responsible for 9.2 percent of all New York-area radio ad activity in 1999.