Secrets to Succeeding on the Web

By: Newt Barrett

You may be concerned about the potential Wal-Martization of the Web. That is, the giant information providers, online commerce sites, game sites, travel sites, etc. have the potential to squash the little guys who staked out spots early on. Or that, as a smaller company, you cannot hope to compete. But, the online world is just different enough to enable smaller companies to thrive in the land of giants.

In the old real world scenario, Wal-Mart would blow into a small town and in the blink of an eye put the local hardware store, clothing store, shoe store, sporting goods store and toy store six feet under. Good for consumers, but horrible for the small business community. It was a zero sum game. Wal-Mart won. The little guys lost.

Interestingly, Wal-Mart, faced with its own Web-based threat, has decided to spin off a Web-only division to compete with its bricks and mortar locations. In true entrepreneurial fashion, Wal-Mart decided that if it didn't cannibalize itself, somebody else would. Of course, in the next few years, Wal-Mart isn't likely to lose much business to its online alter ego. But that will change. In fact, it will lose business to its online equivalent and to online specialists that have a better focus or a better selection in product areas that captivate consumers.

In Southwest Florida, numerous businesses have already fallen victim to this kind of category killer phenomenon as national brands invade our fast-growing region. This applies both to the retail community and to business-to-business enterprises. In fact, effective leverage of the Internet in a bricks and clicks strategy can deliver just the kind of synergy that will ensure long-term survival.

The future lies in integration of real-world and online commerce. As Evan Schwartz notes in a recent article on the AOL/Time Warner merger at www.digitaldarwinism.com:

Note that Schwartz mentions the big swallowing the little. The minnow swallowing whale scenario is unlikely for most of us in smaller companies. But the little guy can and probably should put the Internet to work for his company. In many cases, small companies can leverage great ideas, well executed, to pull off a quick reverse or an unexpected flea-flicker.

In a recent email exchange with Jaclyn Easton, author of StrikingItRich.com: Profiles of 23 Incredibly Successful Websites That You've Probably Never Heard Of (1999, McGraw-Hill), she indicated that small, local companies may indeed have an advantage,

"The local businessperson has a distinct advantage over the national dot.coms: they can touch their customers. The best combination is a hybrid, also called 'clicks and mortar' where you sell online and offline."

Bookstores as Battleground: Bricks to Clicks and Back Again

You've Got Mail!, the Tom Hanks/Meg Ryan film, turned the American bookstore wars into a romantic comedy. But there's nothing romantic for an independent bookseller about the arrival of a Barnes & Noble megalith. Just as local bookstores were caught flatfooted by B&N, so too was the giant chain blindsided by the arrival of Amazon.com with its 2 million books online - and waited two years to respond.

But, apart from the exquisite irony of online poetic justice, smaller booksellers can exploit Web technology, as illustrated with an example from Evan Schwartz's Digital Darwinism (Broadway Books, 1999). Just outside Boston, Brookline Booksmith had a near death experience in 1994 when B&N blew into town. But, by leveraging the Net, the feisty little bookstore fought back to profitability:

• Thousands of website visitors signed up for a monthly newsletter that promoted events, sales, new releases, etc.

• Record crowds attended bookstore events.

• The store sells directly from its website - just the thing during a cold Boston February night.

• The website is promoted inside the store.

• The store created a human-powered book referral service driven from the web.

Brookline Booksmith's advantage: The store is integrating its web and brick and mortar world. Barnes & Noble does not. You can't pick up or return an online purchase at a B&N store. You can't search its website from the store.

Getting Online the Right Way: Time to Rethink Your Business Strategy

For many of us, putting up that first website seemed pretty darned important - although we may not have known quite why. Maybe we sensed that "all companies will eventually become Internet companies, "and we may also have guessed at the obvious corollary that those that didn't become "Internet companies" would drop by the wayside just like the shoe stores in rural America.

According to Schwartz in Digital Darwinism, "The only way to differentiate your Web venture is by creating new value-added applications, assembling bundles of information, and inventing interactive services that transform mere transactions into unique, personalized experiences that competitors would have a tough time replicating."

This may sound like a tall order. But, taken a step at a time, almost any organization can Webify itself. In the months to come, we'll dig into the specifics and offers dozens of examples of companies much like yours that have figured out how to build that bricks and clicks synergy.