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News
E-Commerce
– Suitability and Readiness Assessment (The Melon Test)
1.
Introduction & Purpose
Not all business
transactions are suited to e-commerce. This might be because products
or services are unsuitable, or due to the impact of e-commerce on
existing customer relationships and sales channels. There may be
major barriers to entry
Equally, companies
considering e-commerce need to be aware of the risk of brand damage
or other adverse commercial impact. Service levels which fall short
of customer expectations, inefficient business processes, and inaccurate
business data are rapidly exposed to customers in the e-commerce
world. These factors can damage the standing a business has with
its customers just as rapidly as a poorly designed web site.
This Suitability
and Readiness Assessment is designed to assist businesses in making
a decision on a "web" presence, before any investment
is made.
2.
Suitability
2.1
The melon test
Many of the
major supermarket chains in the UK now offer on-line shopping and
home delivery. But are all of their products equally suitable from
a consumer viewpoint? When you buy a commodity item such as a tin
of beans, cat food or fabric conditioner you will probably be interested
in specifying some attributes of the product you require –
for example; price, brand, size, flavour, quantity. However, so
long as these are satisfied we are unlikely to be concerned to receive
a specific tin, box or package.
However, when
selecting a product such as a melon, most people will wish to hold
the fruit, examine it carefully, squeeze to assess freshness, perhaps
even smell it. Having done so, we will want that particular melon.
Thus, not only would we not select a melon based on a picture or
description, even when we can touch and feel a selection of melons
we still wish to choose a particular one, and to feel sure that
this is the one we will take home. These characteristics make melons
unsuitable for e-commerce sales to consumers.
This changes
when, instead of a business to consumer transaction, melons are
sold in a business to business context. Here, where a volume trade
in melons takes place (whether a case or a container load is involved),
melons can once again be viewed as a commodity – key attributes
such as variety, price, size, quality, stock availability, delivery
time scale etc. become of more interest than characteristics of
individual melons in the consignment. In this case, melons are entirely
suitable for e-commerce trading.
If the product
were a financial derivative of melons – e.g. a futures contract
in melons, a different set of considerations would need to be evaluated.
Access to other forms of information – projected supply and
demand, climate and weather, wars, trading conditions, etc. would
be of far greater use than information related to individual melons.
It is unlikely that such contracts would be sold directly to either
businesses or consumers directly via e-commerce. They are more likely
to be traded via some form of market or exchange – access
to this market, and to other trades within it, is highly suited
to an e-commerce environment, as are "spin-off" services
such as those that support the information needs mentioned above.
The melon test
should be applied to any potential e-commerce proposition, as a
quick and easy way of identifying unsuitable products. As well as
determining whether your proposed product is a commodity or a product/service
to be tailored to individual customers, the melon test gives the
opportunity for an initial review of the following basic questions:
Who are my intended
customers?
How will I approach
marketing of my products on-line?
How will I attract
potential customers to my site?
Are there value-added
services, such as information, related to my product which could
enrich (or even replace) the offer to customers?
David
Hammond - June 2000
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