Electronic commerce confronts the office products industry

Office World News, May 1998 by Layton, Mark C

Mark Layton of Daisytek reports, "I know the E-date!"

Last week I was talking with a good friend of mine and she was telling me about how wonderful her recent birthday had been. Many people had sent her birthday cards. She received a beautiful boquet of flowers, new CD's, a one-year magazine subscription, a new book and a gift certififcate to a major retailer. She had been very responsive and had already returned thank-you notes to all the wonderful people in her life and had it done before the end of her birthday. A very scary adult!

I would be remiss to indicate that this "good friend" is not an adult, but my 13-year old daughter. I was very curious as to how I had not seen all these packages and cards arrive in our home. When I asked the question, I got the response, "Daaad, don't be so stuuupid, all my stuff arrived via E-comm." (The CDs and the book, arrived the next day.)

I have spoken to thousands of people about the potential of Ecommerce in office and computer supplies products for a number of years. My view has always been that 50 percent of the office-product industry will be conducted via Ecomm in the new millennium. Yet, I continue to be challenged by the naysayers who say that the face-toface salesperson or the telephone is still the way to go. Frustrating as it was, I could never point to the Edate on the calendar that E-commerce would represent an E-significant portion of a company's total business. I just stomped my feet and said...It just is E-@!#%!

Well, the readers of Office World News are the first to benefit from my new discovery. I now know the Edate! The date is April 15, 2008. Put it in your E-calendar now! Why this date? Well, a number of E-reasons:

A) The E-Generation-My daughter's generation will be 23, out of college, and living on their own smart cash. Eighty percent of their life today is on the Internet; it can't help but increase when they have their own money. This is the next generation of shoppers! Wake upyou're not getting any younger!

B) The E-Mass-By 2001 (according to a study by New Paradigm Learning Corporation) over 1.7 billion people will be connected to the Internet, a growth from about 65 million today.

C) The E-Products-Office products, with their huge range, recurrent demand and relative lack of sophistication, are perfect E-commerce products. (So are books and CDs.)

D) The E-Experience-With what technology will do for us in the next three to five years, the information and overall "experience" that a customer can enjoy via E-commerce will be infinitely better than the phone or a face-to-face meeting.

E) The E-Tax-The IRS will likely require or provide incentive for electronic filing by tax day 2008, and the amount of cash changing hands on April 15 each year is so big that it can't help but be the day.

Better buying

Last month, I had the pleasure of listening to Dr. Tom Peters, professional speaker and author of numerous books including In Search of Excellence, Liberation Management and The Circle of Innovation. Research conducted by him and his team point specifically to the fact that women and young people are the largest untapped market of buyers in the world. Why? Because the current commerce system has "old fashioned" ways that end up appealing to males and older adults, and often treat young people and women inappropriately. Don't agree? Ask a single female office worker about her most recent carbuying experience. E-commerce changes all this. You can be whomever you want, because the Net knows no age, gender, race, geography or personality.

The PC revolution in America began in the early '80s. By the early '90s in the U.S., 40 percent of all children old enough to watch TV or play Nintendo had a PC in their home. Approximately 26 million of these PCs are connected to the Internet, according to Robertson, Stephens & Company estimates. It is easy to see why a high percentage of kids born in the U.S. since 1980 are Internet and E-comm literate. Call it the E-Generation. That puts them into our business world as buyers of goods around 2005 or so. Is your business ready, willing and able to E-comm? These buyers will prefer it versus the phone or faceto-face. It's what they know.

The E-mass, those using the Internet, exists already and is growing like you cannot imagine. Within the last five years, more than 50 million people found their way to regular use of the Internet. According to Morgan Stanley Technology Research (Chart 1), to reach that many people in five years is historically mind boggling. It took radio almost 40 years, TV about 13, and Cable TV about 10. And, with all the new low cost alternative ways that are being introduced to access the Internet including TV top devices, telephone attachments, special Internet PCs and a variety of mobile units, it is easy to see how most of the world will be connected very soon.

Numerous studies have been conducted over the last year about Internet growth. The studies looked at products people will and will not buy on the Web. Most "experts" agree that low-tech, redundant use, small-sized products are perfect for E-Comm-The E-Products. Sounds like an office or computer supply product to me. Yet, in the office products industry today, the amount of business conducted via E-comm is pathetically small. (Minimal data actually exists, but most numbers are less than 5%.) Yet, other products go nuts. Dell Computer reports that they do over $4M per day via E-comm.