Hi Kip-
Thanks for the article, and even better, your previous post which was very insightful, I thought.
<<"It's just not a sustainable [business] model," says Steven Frankel, an analyst with Adams, Harkness & Hill in Boston. "At this point its model is broken." >>
Yeah, ONSL is looking like road kill right now, and it has nothing to do with the analysts. I like the above quote because of the "sustainable" word; this ties in with what you said earlier. One of the points you made is that a focus on customer service is a relic of meat space retail. Actually, to be more precise, you pointed out that customer service, when performed person-to-person, is from the old B&M world. However, in cyber space, I believe you also argued that folks aren't currently interested as much in customer service- pricing, selection, availability, etc. are more important- and what customer service they do need can be mostly satisfied by a person-to-software solution. Perhaps.
However, I'm not so sure. What is essential to retail, whether it occurs online or off? Well, it seems to me that customer service is in fact crucial, though this may not show up in the short run. It takes time to build a brand, and it takes time to build customer loyalty. Right now there hasn't been much of that on the web in its early days. That's the next stage; EGGS came to the web with some, and if they develop it this may be what makes EGGS' net biz sustainable in contrast to the model of ONLSL which may not be sustainable. Although ONSL has in the past bragged about their customer base and stressed that many of their orders come from pre-existing customers, how do they retain those customers? It's not by pricing alone, which on the face of things is ONSL's best feature (however they also claim to be very good at customer service).
Now, at least for the next several years, there will be many times when customer service of the person-to-person variety is going to be very important. Just the other day I had to call AMZN and speak with a person to resolve a problem. And there's a lot of movement right now to set up electronic help desks where one customer service rep online fields several customers at the same time, so it still seems desired.
This is the kind of fluffy stuff and anecdotal evidence that one can go on talking about forever, and I'm getting tired, so before I ramble further let me sum up. I think customer service might actually be something that distinguishes a long term sustainable model from a flash in the pan. I also think that person-to-person CS will be needed for a while. When the web is even more common place for shopping, you will have a return to traditional retail values and virtues. But I also think software solutions will help a lot. Finally, I don't see much evidence that the Cust. Serv. issue is playing a role yet in sorting out winners from losers, but it may in time. And, frankly, I've not been impressed with EGGS' software approaches to many issues- they've been way behind on certain aspects in the past (auction bid tracking, for instance). They're OK, but they need to go a loooonnnng way to fulfill their promise, IMO.
Inconclusively yours,
Anaxagoras |
