E-Commerce Opportunity

The E-Commerce Opportunity

A secure e-commerce Web site can provide businesses with powerful competitive

advantages, including increased online retail sales as well as streamlined application

processes for products such as insurance, mortgages, or credit cards. E-commerce credit

card sales can be especially lucrative: according to independent analysts, cash

transactions on the Internet will reach $9 billion in 2000, and $30 billion in 2005.

By offering products and services on the Web, businesses can gain unique benefits:

* New customers: Anyone with an Internet connection is a potential customer: millions

around the world are already using the Internet for business transactions. Web

storefronts are open 24 hours a day, and require no investments in brick and mortar.

* Cost-effective delivery channel: Many products and services, such as software or

information, can be distributed directly to customers via the Web, enhancing the

customer experience and increasing profitability by eliminating the shipping and

overhead costs associated with order fulfillment.

* Streamlined enrollment: Paper-based enrollment workflows are fraught with delays.

Applications for insurance, a mortgage, or a credit card, for example, can be held up

in the mail. And once received, application information must be entered into

computer systems manually, a labor-intensive process that can introduce errors. By

accepting applications via a secure Web site, businesses can speed application

processing, reduce processing costs, and improve customer service.

* Better marketing through better customer knowledge: Establishing a storefront on

the Web positions enterprises for one-to-one marketing--the ability to customize

products and services to individual customers rather than large market segments. The

Web facilitates one-to-one marketing by enabling businesses to capture information

about demographics, personal buying habits, and preferences. By analyzing this

information, enterprises can target merchandise and promotions for maximum impact,

tailor Web pages to specific consumers, and conduct effective, tightly focused

marketing campaigns.

No business can afford to ignore this opportunity. But businesses also can't ignore the

potential pitfalls. Before entering the fiercely competitive e-commerce arena, businesses

must carefully assess and address the accompanying risks.

A. The Risks and Challenges of E-Commerce Trust

To succeed in the fiercely competitive e-commerce marketplace, businesses must become

fully aware of Internet security threats, take advantage of the technology that overcomes

them, and win customers' trust. Eighty-five percent of Web users surveyed reported that

a