Will e-com survive?

E-commerce is big business

today. Enough and more has been written about it. Here we’ll concentrate

on just one thing. What is it that holds e-com up? Or as the business

consultants say, what’s the value proposition?

Unfortunately, the value

proposition for most e-com sites seems to the novelty factor of shopping

online, discounts and other freebies, and huge advertising spends. Hardly

the stuff that can hold a business up for long. No wonder then that most

online business-to-customer setups are deep in the red.

So, unless e-com sites are

able to develop value propositions for potential customers that’ll

simultaneously give them a healthy bottom line too, they’ll find it

difficult to survive. In other words, if the value they offer is going to be

just the convenience of the Web (discounts and freebies must come to an end

someday), then they may face a very tough challenge from established

brick-and-mortar businesses that can go online and offer the same

convenience.

In short, we may see the

decline and fall of most clicks-only businesses, unless they go the

clicks-and-mortar way. In fact, the first symptoms of this are already

available in the West. Amazon.com is quietly making heavy investments in

conventional distribution infrastructure. CDNow, which at one time was

heralded as the model for the future, is now facing very tough times. The

others better watch out.