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December 21, 1998

Back to Basics:
Customer Focus On The E-Commerce Frontier

By Charles Pelton

ne of the themes that pops up from time to time in IT circles is the notion that we've entered the age of the customer. Believe you me, we never left it. No business operates successfully without blind devotion to its customer base. No business grows without slavish attention to customer needs and satisfaction. And no business survives if it ignores customer concerns.

The Web and Internet-based transactions to businesses and consumers have caused us to, once again, consider that we've entered the age of the customer. But there are some key differences, and these point less to the development or integration of customer-centric systems and more to the notion of using technology to build the customer experience. Moreover, in IT circles it's best not to restrict our view of the customer experience solely through the lens of information technology. We should add two key ingredients: entertainment and community.

If success is defined by customer retention and loyalty, then the more complete and positive the customer experience, the less likely it is that any of us will switch to a new supplier, vendor, or brand. We enjoy hair salons that provide wine and music. We wear and use sporting equipment with recognizable logos (Nike, New Balance) because these logos create community; they mean something.

Consider the Web strategy at Levi Strauss & Co., which recently launched its direct-to-consumer Web site, in part to catch up with arch-competitor The Gap Inc. On the Levi site, you can select music and entertainment preferences and the site will suggest clothing that you can buy (over the Web, of course), based on your presumed lifestyle. You experience the act of purchasing apparel through the lens of what that apparel means. That's entertainment--and community.

Now consider the trend toward portals, but not the mega-portals of search-engine providers such as Yahoo and Lycos, or access providers such as America Online/Netscape or Microsoft. Today, all smart Web delivery of services aggregates or points to a collection of products or services. Debra Chrapaty, president of E-Trade Technologies and CIO of E-Trade (and InformationWeek's CIO of the Year), says the aggregation of financial services is key to her company's growth. It isn't just about buying or selling stocks, bonds, and options--it's about having a single place to visit to buy or explore insurance and banking services.

Creating portals of similar products and services is not unique to the Web. The reason our shopping habits changed from the pre-World War II tendency to frequent single-category stores to shopping at supermarkets, discount stores, or suburban malls, was to allow us to purchase products and services conveniently. The Web is no different. It's not what is for sale, it's the experience of purchasing that product. "Going to the mall" is economic activity, entertainment, and community.

The Internet provides an extension of our ability to gather and organize information about buying. Wal-Mart has been doing this for years--it's key to the company's efforts to increase revenue and cut costs. But what Web-based purchasing does is add to the equation a medium by which we personalize service very cheaply. One-to-one marketing is not a business school mantra. The trick, of course, is integrating that information with the data that's within legacy and client-server databases and data warehouses.

But that's still too "digital" a concept, one that's rooted in traditional IT processes. And that's why it's vital to add two ingredients: Hollywood and the ethos of entertainment, and a strong sense of community. For travel and transportation-oriented Web sites like Travelocity, why not surround yourself with the sites and sounds of your destination? Levi's strategy is to push the consumer into experiencing apparel the same way they would walk through a physical store--in effect, surrounded by the trappings of popular culture.

Consider the content on Amazon.com. You don't just buy books, you join discussion groups about the book or the author (and now you're linked to the experience of buying music and other products). You become part of a community. It's why great bookstores have always held readings by poets and writers. You experience the world of books and knowledge. Internet-based selling communities are just adapting a tried and true physical model--creating the best customer experience.

The 1999 version of the age of the customer should really be looked at as an exercise in true convergence. You'll obtain and retain more customers if you combine the digital world; the entertainment experience associated with film, music, or television; and the good feelings engendered by community.

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