By Bruce
McCracken
The rags to riches sagas of the dotcom
world of e-commerce abound. It is a high stakes gambling arena has catapulted
unknown entrepreneurs to seven-figures-plus incomes and then to financial abyss
in a matter of months. Three of the four dotcoms advertising during the
television broadcast of Super Bowl XXXIV were history by Super Bowl XXXV,
echoing the refrain from James Taylor’s Fire and Rain… "Sweet dreams and flying
machines in pieces on the ground."
For Hewlett-Packard, most often talked
about of late for its proposed merger with Compaq Computer, the decision on
whether to move into e-commerce was daunting. Marketing and advertising manager
for hpshopping.com, Shirley Choy-Marshall recalls, "Before making a bold move
into e-commerce, HP needed to ensure that its customers valued online shopping
and that it made sense for HP to move forward with its own online store."
While many e-commerce sites are the
reason for a company’s success, the opposite is true for hpshopping, which
started with offline success before implementing an e-commerce model. HP
established itself as a technological innovator with proven reliability, service
and value when it introduced the Thinkjet printer in 1984. By the early
nineties, when many consumers were beginning to buy a home computer system—a
four-figure luxury requiring the additional purchase of a keyboard, mouse,
monitor and printer—HP established itself as the leader in the printer industry.
At every level, HP printers were
better, more reliable, readily available and featured less expensive supplies
than those offered by the computer manufacturers or competitors. Further, the
product was backed by the best support and customer service in the industry.
By the late 1990s, HP decided to go
forth with an e-commerce business plan in measured increments on a market-driven
timetable. "The predecessor of hpshopping.com started in 1997 as an outlet
center offering refurbished products," says Choy-Marshall. "In the first year,
customers found the online store through hp.com."
Because printers were seen as HP’s
bread and butter, it was printers that the company first focused on when
building its new site. "Initially, the balance was naturally higher for printers
and scanners. From this, the site grew product category by product category,"
Choy-Marshall says.
The site was an immediate success, and
HP launched hpshopping.com in 1998. The company’s great online achievements are
largely the result of fusing its old-fashioned service to its loyal e-commerce
customer base. "Since the inception of hpshopping.com, HP has been focused on a
strategy to reach customers anytime, anywhere, making the shopping experience
convenient for customers. Hpshopping.com is an integral part of this strategy,"
Choy-Marshall says.
"The site attempts to meet the needs of
our customers quickly, efficiently and successfully. The navigation is very
straightforward with clear product categories and descriptions with a modern
e-commerce look," she says. "Hpshopping.com shows people interacting with
products for a warmer and more welcoming feel that provides convenience to the
customers. The commitment to service is shown by the presence of a toll-free
number as well as Web chat for questions and sales help."
The results have been spectacular. In
only its second year, fiscal year 2000, hpshopping.com increased profits 450%.
The 2000 holiday season statistics demonstrated the success of hpshopping.com.
Nearly 5 million people shopped hpshopping.com over the 2000 holiday season.
December 2000 orders were up 210% from December 1999 orders.
Hpshopping.com has also been an
integral part of the company's dramatic success in marketing its PCs. U.S.
shipments rose from 3.9 million units in 1999 to 5.6 million units in 2000.
Worldwide shipments raised from 7.6 million units in 1999 to 10.2 million units
in 2000. U.S. marketshare rose from 8.8% in 1999 to 11.4% in 2000. Worldwide
marketshare rose from 6.5% in 1999 to 7.6% in 2000.
Choy-Marshall definitely has some
advice for those entering e-commerce. "Be clear about your goals," she says.
"What customers are you trying to reach? What is going to be your site’s
strength? In today’s tumultuous e-commerce environment, focus first upon the
basics: good return policies, live customer service, helpful and clear product.
Don’t be afraid to test. There is a lot of time and cost, so it is often smart
to do small mini-roll outs before committing to a full launch. Also, don’t
forget to collect user feedback. Focus on the customer. The customer is the core
of your business and word of mouth is the best kind of advertising that you can
get."
And Choy-Marshall’s watchword for the
future shouldn’t surprise anyone who has been following HP’s recent moves.
"Consolidation: Only the strong will survive," she says. "With dotcoms closing
down one by one, every player out there out there has an opportunity to gain
marketshare. As companies weigh their choice between going belly up or
partnering with others to stay in the game, we should be seeing smarter
alliances being made to capitalize on respective strengths. ETailers
overestimated how quickly consumer behavior would adapt/change to their
offerings. Is the world ready to order fifty pound bags of dog food over the
Web? Are they really interested in buying groceries online? Sticking with basic
needs will probably make more sense in moving forward."
Bruce McCracken is a
freelance writer based in Texas.