Another blow for e-commerce

A Happy New Year to you! If you were one of the 40,000 dot-compensated workers who lost their jobs in the dot-collapse of 2000 that took out some 130 dot-on-line firms, may 2001 be a better year for you.

A major part of the problem – other than the irrational optimism that business without profit makes sense – was that no one foresaw how difficult it would be to run an on-line business. For example, Group Ltd. consumed a staggering US$223 million just on marketing and died with a resounding thud last year.

Even dot-companies that survived 2000 are predicting their own doom. Consider eToys Inc.: It burned through US$190 million last year and predicts it will go belly up sometime in March if it doesn’t get a large capital infusion.

What can we blame the collapses on? I’ve commented many times on the public’s tendency to blame technology, especially the Internet, for events and situations that are the fault of people. The dot-collapse was certainly people problems more than technology problems.

There were two primary people problems: Venture capitalists who didn’t want to do more than collect windfalls, and immature management in the dot-coms.

But make no mistake: The dot-coms weren’t and aren’t the only ones to have trouble with e-commerce. Even megacorporations with deep pockets seem to have problems integrating real-world processes with on-line commerce.

Let me give you an example. After Christmas we decided to take my sister’s family, which is visiting from England, to Disneyland for my nephew’s birthday. Common wisdom is that after New Year’s day Disneyland has smaller crowds, which is just the way one wants to visit it (we once went in February while it was raining and the longest queue was about 5 minutes – it was great!).

So being a dot-com kinda guy, I went on-line to book tickets and hotels for Disneyland.

(Allow me to digress and note the virtual passing of DotComGuy, the fellow who legally changed his name from Mitch Maddox, and was going to hole up in a house for a year with the objective of living off stuff he could buy on-line. Sponsorships were to pay the bills but they didn’t materialize and DotComGuy is going back to being Mitch Maddox. Such is virtual life.)

Anyway, I went to the Disney site and discovered all of the gotchas. You can’t book two rooms at once (you have to enter the data twice if you do), you can only book a two-night stay and the entire system, at least on the day I used it, locks up on you. And wow, is the site complicated!

Now this is Disneyland, a mecca of consumer marketing. If they can’t get e-commerce right it must be a tough thing to do. The problem for Disneyland and many other e-commerce players lies in the lack of flexibility in their user interfaces.

Retailers with limited inventories have it easier. For example, CD-Now only sells CDs, tapes, videos and books. There’s not a whole lot of flexibility needed and the site works like a charm.

But selling something like hotel or vacation packages requires intelligence – something that Web sites in particular and software in general are not overendowed with. Perhaps e-commerce interfaces will be the first commercial conquest of artificial intelligence.

Anyway, the e-Rat let us down. Then friends told us that Disneyland attendance has been amazingly high since the end of December. Apparently they have stopped selling tickets by 11 a.m. most days (not that they said so on-line).

So we had a great day at Santa Barbara Zoological Gardens, the Rat lost a minuscule amount of business, and e-commerce suffered another blow.

Gibbs is a contributing editor at Network World (US). He is at