DOT-COMS DIVIDING ON STRATEGY
Byline: Scott Malone
MIAMI BEACH — The dot-coms were out in force at last week’s Material World show, and a number of companies there were in the process of launching or re-launching their e-commerce functions.
With the heady build-it-and-they-will-buy days of e-commerce now a distant memory, the Web exchanges at the event focused on spelling out how they’ve refined their strategies. They mostly fell into two camps, one favoring exclusivity and promising users to carefully screen all prospective members and the other being the more-the-merrier approach.
One that followed the first line of reason was Etexx.com, a Nice, France-based Web site, functioning as an online catalog for the past year that is launching its e-commerce program.
“On a public marketplace, it’s fine having thousands,” said Julien Berger, director of business development for the online exchange. “But will they really do substantial business together if they didn’t know each other already?”
Rather than working as a public exchange, where any buyer can log on and see the wares of any seller, Etexx.com has set itself up as a platform that can host multiple private online exchanges. This means is that any seller participating in the online exchange must authorize buyers to come onto its part of the Web site.
The reason for this approach, Berger explained, is to push e-commerce beyond the point of an auction-style approach, where buyers go online and canvass multiple sellers until they find the lowest price.
“That may be right when you’re talking about yogurt or computers,” he said. “But when you’re talking about textiles, you need to bring business value.”
The value of Web exchanges will be in cutting the cost of the buying process — phone calls, faxes, paperwork — not in lowering the prices that buyers pay for goods, Berger said.
“If buyers have not been able to cut costs, then we’re not going to be able to help them do that,” he said. “We’re not professional buyers.”
While exclusivity is still a major part of Etexx.com’s message, obviously exclusivity can be taken to an extreme — traffic is essential to even the toniest of shopping streets. Berger said that over the last year, between the Web site’s catalog function — on which about 150 European mills show swatches — and the two beta-test private online exchanges the Web site has been running since March, Etexx.com has signed up 2,000 validated buyer and designer members.
Taking the opposite tack is Buytextiles.com, an online exchange run by Ecom Partners and supported by the American Textile Manufacturers Institute.
The Web site is currently set up on an auction model, where mills offer lots of fabric, yarn and other products to the highest bidder. As of last week, there were about 200 active auctions on the Web site.
According to Thomas Case, technical manager with Atlanta-based Ecom, Buytextiles.com plans in the next few months to introduce a reverse-auction capacity, which would allow buyers to post a notice of the goods they need and then give their order to the company who offered the lowest prices.
The exchange hopes that strategy will drive more traffic to the Web site.
“We think that’s going to drive more participation by mills,” he said.
A number of Web sites are sitting on the fence when it comes to the question of exclusivity versus volume.
The New York-based online exchange Textrade.com, founded a number of years back as the Global Textiles Network, is currently in the process of relaunching itself, according to Ralph Newitter, vice president of marketing and sales.
Over the next two weeks, it plans to reintroduce e-commerce functions, after first combing through its membership roster and verifying that all the people registered as fabric buyers are in fact professional fabric buyers.
Newitter said the Web site will offer both private and public online exchange options.
Similarly, Los Angeles-based Web exchange Clicktex.com claims to have hosted more than a million dollars in transactions since launching early this year.
According to Michael Rappaport, vice president, the Web site offers both private and public exchange options. He said that having each option is important, because different types of sellers choose different approaches.
Companies that are trying to protect their textile brand images and maintain high price points among their customers prefer the private option, whereas businesses that are trying to drive their sales volume gravitate towards the public approach, he said.
“It depends on the brand identity a company has,” he added.