Column: How vendors benefit from digital data services

Online commerce has the potential to be the "killer application" for the World Wide Web. Everyone talks about how the Web provides a forum for almost unlimited advertising. But more importantly from an IT perspective, online commerce provides a method for vendors of digital data, including software, to deliver their products to established customers at a fraction of the price of current practice.

There are a couple of models of online commerce to look at. The first is using the World Wide Web as just another catalogue/price list. You log into a vendor's site--whether it sells modems, coffee mugs, or wine--peruse the products for sale, fill out an interactive order form, perhaps enter your credit card details ... perhaps not (you can fax your credit card details if you so desire), and email the order out. The vendor then processes the order, puts the product in a box, and sends it to you, the customer. The Internet has streamlined the process, but not really changed the concept.

The advantage for the vendor is that the cost of sending out catalogues is reduced, the product information is always up to date, and a sales rep's time is not taken up by people just browsing. Plus there is the possibility that the market will expand as people come across the site while browsing the Web, especially if the site is well-indexed. There are quite a few New Zealand sites that offer this type of service already with many more coming online all the time.

The second model is much more interesting from a digital data vendor point of view. In this scenario, users log on to the site and use a search engine to find the product they require (it could be a set of company details, a patch for a particular type of software, or a new version of a computer game). Before they can download the data, they must pay. This can be done by registering their details beforehand (a viable option for regular customers or established clients), in which case an invoice can be generated by entering credit card details using encryption software (again requiring some sort of effort), or paying in the traditional manner (as above).

The advantage to the vendor is that the cost of sale drops dramatically. A sale is made with no sales rep time taken at all. The client does all the searching, pricing and ordering. The application handles product delivery. This model is especially useful for vendors selling databases, lists, etc that are updated on a regular basis. The products have to be digital: software, games, commercial data, spatial data, special reports, images, or statistical data. Not only can the ordering be done online, as above, but product delivery can be effected electronically as well. Just the time and effort saved from copying files to a disk and sending the disk through the post can be significant.

This type of online selling has yet to gain any real following in New Zealand. A few vendors offer downloadable demo software and some offer electronic reports and information over the Net, but the floodgates are still closed. I suspect we will see tremendous growth in this arena as the technology matures in respect of search engines and payment methods and as industry awareness grows. The technology is in place and operational ... it is just a case of applying the technology to the market.

(Phil Parent is a Computerworld contributor and Internet consultant at Creative Design. He can be emailed at pjp@iprolink.co.nz or contacted via Creative Design's Web site, at http://www.cd.co.nz/cd)

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