It seems that every time I pick up a newspaper or log on to the Web, I read about another Dot-Com going belly-up. In the last several weeks alone, a number of Internet start-ups have closed their doors, including Eve.com, Pets.com, Furniture.com, MyLackey.com, Mortgage.com and MotherNature.com.
So what does this mean for the finishers, suppliers and service providers trying to flourish on the Web? Is it time to sound the retreat and head back to your brick and mortar? While I think that might be a bit premature, I suggest that there is a need to buckle down and perhaps even re-evaluate our e-business strategies. Here are a few tips to help ensure your continued survival in the Dot-Com deluge.
· Make your new mantra "The sky is not falling": Regardless of what happens in the next few months, bear in mind that the Internet economy—like any economy—is cyclical and corrective in nature. Every economist in the world will tell you that times of growth are always followed by periods of retrenchment. When you consider how quickly and substantially the Internet economy has grown, it's not unreasonable to expect that the subsequent retrenchment will be equally as dramatic. Simply because the Stock Market has seen better days does not mean that finishers should abandon the Web as a means to buy supplies and sell their services.
· Make sure that the products you buy and services you supply are"e-friendly." Much of the downfall of many Dot-Coms can be attributed to the fact that the goods and services they were offering really weren't suitable for e-commerce. Case in point—the demise of Furniture.com. Is it really practical to think that somebody would buy a $2,000 sofa over the Internet without seeing it, touching it or sitting on it? Likewise, are you as a finisher going to spend 10 times that much on a piece of equipment based solely on a 100 pixel-wide photo and 200 words of text?
· Don't put all of your eggs in one basket. Don't allocate too many of your resources to the Web. Instead, complement your brick-and-mortar presence with an online presence. At the very least, offer multiple products or services so that if one does not catch on, you don't have to file Chapter 11 as a result. PPG developed its OneSource Coatings site in an effort to reach out to smaller industrial customers who might not otherwise have been able to do business with them. This move allows PPG to pursue relationships with new customers while still maintaining a conventional business model. Should things go bad for OneSource Coatings (which I think is unlikely), PPG's core business shouldn't suffer as a result.
I anticipate at least one more big wave of Dot-Com deaths after the holidays. And even then, Dot-Coms, will continue to rise and fall with regularity. But for those companies with the resources, a solid business model and the will to persevere, this down period is a great time to build on customer loyalty and market share. When conditions improveand they WILL improve—the survivors will reap huge benefits.