Research Reports
Free and commercial research reports: a short guide.
Sources of Ecommerce Information
There's no shortage of 'information' on ecommerce, and in terms
of increasing reliability the sources could be ranked:
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internet 'get rich quick' schemes.
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'killer guides' to some aspect of ecommerce: marketing, copy-writing,
etc.
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ecommerce sites apparently offering guidance but in fact
promoting a limited range of goods and services.
Followed by:
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ecommerce news sites.
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guides to ecommerce from reputable publishers, some in e-book
form.
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technology research reports.
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market research reports.
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academic studies.
All material has its merits and problems. Sources of the first
two types usually contain good ideas, but ecommerce is a good
deal harder and more complicated than claimed. Type 3 sites provide
helpful introductions, but the recommended products are not necessarily
the best going. Type 4 sites keep you up with events, but the
stories are more company promotions than solid information. Some
type 5 books should be in every e-marketer's library, but the
mechanics of publishing prevent the information being very full
or up-to-date. Technology research is a $15 billion/year industry,
but not as independent as claimed. Market research is essential,
but has problems listed below. Academic studies provide a perspective
and useful element of caution, but tend to be backward-looking
and concerned with business theory.
Market Research Reports
We have compiled summaries of ecommerce prospects from the abstracts
freely provided by the leading market research companies, but
it's obvious that the:
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full reports are not cheap
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findings differ between surveys
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predictions are continually being revised
Which survey should you trust? And how many reports should you
purchase — all of them so as to compare, or none at all?
We can't answer these questions directly, but we do provide some
questions you might ask yourself.
Data Quality
Internet users are so conditioned to receiving free information
that they sometimes suppose that all information is theirs by
right. It isn't, and can't be. Information has to be collected,
analyzed and disseminated, and the cost of doing these must be
met somehow. Often the process is very indirect — keynote
speeches at institutional get-togethers, for example, which further
the aims of the industry concerned — but the exercise has
eventually to end in some benefit. And that applies even to interviewees.
Data collected by market research companies are only as good as
the questions and persons asked. CEOs who give up valuable time
to answer journalists' questions understand that the increased
publicity helps sales and market standing: they're not going to
be self-critical, or give away company secrets. By its very nature,
all commercial information is suspect, and its value is often
proportional to the effort put into its collection. Before purchasing
any report, try (and it's not easy) to find out:
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when the data were collected: ecommerce changes rapidly.
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how the market data were collected — questionnaires,
analysis of company reports, interviews, etc.
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the identity of the interviewees or questioned, and whether
they were in a position to know and be candid.
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statistical validity of the data.
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matters that might affect judgment — inducements offered
to those participating in the survey, etc.
Then ask yourself if you can properly use the information. You
may learn, for example, that online customer acquisition costs
are now averaging $40, but do these apply to the online operations
of household brands or to market newcomers? And in what market
sector? Differences are crucial, and you'll want to be sure that
the sample represents your sort of company. Check that the:
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data could be relevant to your needs.
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predictions have been reliable/useful in the past.
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Market research company has a good reputation, and has not
simply presented what subscribers wish to hear.
Are we implying that market research is a waste of money? Certainly
not. Though marketing usually much exceeds the costs of getting
a site online, it's usually essential. Indeed, some form of market
research is unavoidable, and without its guidance you'll be flying
blind. But just remember that information has to be used intelligently.
If you're unsure of a report's value, you may want to commission
your own market research, though the cost will be an order of
magnitude higher.
Surviving in Ecommerce
Ecommerce defied gravity in its glory years. Growth, market
share, brand awareness, perceived value — these seemed far
more important than mundane matters like return on investment.
While capital was cheap, ecommerce could afford to live on vision,
but most companies now have to watch the bottom line. The ecommerce
divisions of large organizations may not need to generate a cashflow
yet, but management most certainly expects a sensible plan for
the longer term. And smaller companies have much shorter lead-times
to return positive cashflows and ROI.
These are still problem areas. Future cashflows are notoriously
unpredictable in a new economy. Share prices are also volatile,
giving wide variations in any figure for market capitalization.
Another approach has therefore been to consider only future revenues
because the better-placed Internet companies have spent heavily
on marketing, at the expense of immediate profits. {2} Ecommerce
companies, though far from profitable, may also have achieved
a commanding position in the marketplace, which makes them valuable
acquisitions to a company wishing to enter or expand in that marketplace.
A fifth approach, traditionally adopted by companies that extract
or employ commodities with fluctuating prices — oil, minerals,
cocoa, etc. — is to watch the production costs of competitors.
Operations are acquired only when production costs can be kept
within the industry lower half or lower third, ensuring that half
or two thirds of their competitors will go out of business before
they themselves will be affected — allowing the market ample
time to correct itself.
The various approaches of assessing an ecommerce operation are
not mutually exclusive, and much depends on management's goals.
Online selling won't be a mature market place for many years to
come, and it's still not known how valuable is first mover advantage
— i.e. whether new companies can catch up with market leaders,
learning cheaply from their mistakes. Safety lies with the fifth
approach, of course, and with the majority of small, ill-informed
ecommerce operations still expected to fail, anyone determined
to succeed should:
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have the resources to survive 5 years of little or no profits.
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keep selling costs in the bottom third of their particular
market.
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minimize setup and operating costs, so that a decent ROI
is achievable in the long term.
Taking It Further
Before spending hundreds on your next research report, you might
want to see what Ecommerce Digest can offer:
An overview . . .
- The Internet's most detailed guide to ecommerce: 185,000 words
/ 550 pages in pdf format.
- 160 reference sheets summarizing a particular aspect, with
advice and resources as appropriate.
- Over 3,300 resource listings grouped under 260 headings: each
hand-picked on its merits.
- Fourteen comparison tables in key product areas.
- A proven approach to planning ecommerce.
- Practical advice on improving sales and conversion ratios.
- An extended guide to pay-per-click and sponsored listings.
- Use of business blogs, advised and ill-advised.
- Practical security aspects: keeping yourself safe.
- Testing sites and ideas at negligible cost.
- Over 100 case studies, both general and dotcom failures.
- Notes on ecommerce strategies and use of the resource listings.
- Tutorials on AdSense, ePublishing, eBay, RSS feeds and commercail
blogging.
- Ten up-to-date surveys of ecommerce prospects worldwide.
- Insider information based on Internet research and our own
studies.
- Strategies to test customer behaviour and improve sales.
- Comes as an interlinked webpage ebook (2 Mb) and as a pdf
document (9 Mb). The one-time subscription covers both.
Click here for
a full contents listing of the current edition.
Our
$37.50 e-book comes with a 30-day, no-questions-asked guarantee.
If not fully satisfied, then simply email us for a prompt and
full refund. Material is continually being checked and extended,
and purchase includes free updates.
The e-book comes as interlinked webpage compilation for ready
reference (2Mb) and as a PDF document (9Mb, 550 pages) for extended
reading. The PDF document can be read on all platforms, but the
interlinked webpage compilation can only be read on Windows platforms
( Windows 98x, Me, 2000 and XP machines).
Our July 2008 update will include an extensive tutorial on using
the pay per click search engines.
Payment is simple. You can pay by secure credit card etc. through
eMETRIX.
Immediate download follows payment, and you will also receive
an email confirmation from sales@emetrix.com.
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