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Four Percent: Feedback from readers

There was quite a bit of feedback about the Four Percent story. Bill Sell, Managing Partner at Advisor Communications in Framingham, Massachusetts said that he had been looking for a 27” television with a specific housing size to fit in a wall unit. For over a month he had been visiting "all sorts of stores" but usually finding the specific item he needed "out of stock" and, he added, "no interest on the part of the sales people to help find it". With his existing TV getting worse and the Red Sox game coming up, he decided to search online. In short order, he found the unit in stock at a Best Buy store 40 miles from the area where he had been doing his "physical" shopping. Bill ordered and paid for the TV online, got a map with driving directions from the Best Buy site and received a confirmation email saying that "his" TV was being pulled from inventory. He then received another email, this time from a service manager at the store saying that the TV was waiting for him with his "name on it".
The elapsed time from starting the search online and receiving all the communications: 10 minutes. Bill said, "No gas involved, and a complete surprise to me how easy this was". He drove to the store, picked up the TV, and was "out of the store in less than five minutes". "It’s restored my faith in the e-commerce model – one where I didn’t have to pay a huge shipping premium". Bill says, "Keep up the encouragement for the medium!". Ok, Bill, you can count it.
Alan Herrell is a web designer and blogs as "the head lemur". He questions the four percent assertion. Like Bill, Alan he has some personal experience, in case through his own business. Alan has a number of clients who use the Internet "to increase sales" but he believes that their results are not counted in the officially reported e-commerce. He cites two examples.

  1. An auto wrecker has a web site that has a request form used to look for parts. The wrecker responds with a price including shipping. Using programs such as UPS Worldship, ("a real deal closer") allows the customer to know to the penny what the total purchase will cost. Once the agreement is reached the customer is contacted and credit card information is taken over the phone, the package is shipped and the purchaser not only gets the part and a receipt but, while it is in transit, the customer receives an email with the tracking number so they can track the shipment. Alan says, "While this may be a case of splitting hairs in terms of not using an e-commerce gateway, this is still an e-commerce transaction". The customer gets tracking from contact to delivery. The auto wrecker gets increased sales and "virtual elimination of fraud" by using the phone and email instead of credit card companies — and their service charges.
  2. Body shops and insurance companies are relying more and more upon electronic claims handling from assignment, through supplement, through final billing, with the only contact between the body shop and the insurance company being email.

In summary, Alan believes that e-commerce has a much higher share of the domestic product than is being counted, and it is "in the counting mechanism rather than in the technological barriers, or fears about identity theft" that are causing the undercount. "Nope, I think that e-commerce accounts for a far higher figure than 4%. More likely in the 10-13% range when you factor in "Internet-related methodologies". I think Alan makes some really excellent points. Hopefully, the methodology for collecting and reporting e-commerce activity will continue to improve.