Old dogs, new clicks: during the past 10 years, e-commerce has changed dramatically. Is your company keeping up?

EXECUTIVES WHO THINK THAT THE DOT-COM collapse, channel conflict, and consumer fears of identity theft have combined to make E-commerce strategy a low priority should think again. Ten years after Amazon.com and eBay made "E-tail" a household word, companies in many industries are taking a second look at E-commerce, and finding ways to overcome old problems and tap new opportunities.

Last year, E-commerce sales hit $69.2 billion, and while that equates to less than 2 percent of all retail sales, it is a startling 23.5 percent jump from the previous year. Analysts believe the online channel may account for 7 percent of all retail sales by 2010. That's a potential increase of nearly $200 billion, which means companies that were turned off or got burned the first time around have plenty of incentive to try again.

And many are. No longer seen as a separate entity (with its own dreams of IPO glory), today's E-commerce effort is framed as an integral part of a multichannel sales-and-marketing strategy predicated on giving customers what they want the way they want it. That means company strategies vary widely. One retailer's Website may sell a fraction of the inventory displayed at its stores, while another may sell quite a bit more. Some see their E-commerce platforms as the carrot enticing customers into their shops--or, if they are manufacturers, into the shops of their channel partners. Others see E-commerce as a way to reach customers who can't, or won't, shop any other way. Rather than build dot-corns because their competitors have them--often the motivation 10 years ago--companies today think deeply about the purpose of their E-commerce effort before giving it life.

Dot-Com Delivers - two e-commerce delivery services, Urbanfetch.com and Kozmo.com, battle to control the market in New York City

For less than you would pay at the store, INTERNET SERVICES bring media and munchies right to your door.

THE REAL FIGHT in New York this year has nothing to do with the Senate contest between Rudy Giuliani and Hillary Clinton. It's the battle between two Manhattan companies--Urbanfetch.com and Kozmo.com--for supremacy in a business that barely existed a year ago: whizzing Web-ordered food and entertainment to customers in an hour or less.

But then New Yorkers expect, and usually get, just about any sort of consumable delivered to their door. What makes Kozmo.com and Urbanfetch.com novel is their use of the Internet to deliver faster and better than anybody else. All you do is fill out a short account form, add goods to a shopping cart, check out with a credit card (sorry, no cash on delivery), and the goodies appear on your doorstep.

With the help of our far-flung associates (who literally worked for food), Online Shopper put Kozmo.com through its paces in the five cities it serves: Boston, New York, San Francisco, Seattle and Washington, D.C. If you don't live in one of those places, sit tight, because Kozmo.com plans to incorporate at least 20 more cities this year, starting with Los Angeles (Chicago and Atlanta are next). Urbanfetch, which we tested for comparison, serves only New York but is considering expansion here and abroad.

A Web weekend. Here is what Kozmo can slide on to your doorstep in less than one hour: books and CDs, DVDs and videos for rent or sale, video games and magazines--plus drugstore items and the snacks needed to experience all this entertainment properly. Kozmo will also sell you a Sega Dreamcast, Nintendo 64 or Sony PlayStation player, and Urbanfetch has a full electronics store for those who need a Palm Pilot on their threshold in a New York hour.

The edibles vary by city, but nowhere could Online Shopper spin a proper meal from Kozmo's menu--flatbread sandwiches in New York and refrigerated pizza in San Francisco are as close as it gets. Urbanfetch has a few offerings at the other extreme of the scale, including a lobster dinner for two. Both services mercilessly target the instinct toward sugary indulgence with candy, cookies, sodas and more flavors of Ben & Jerry's ice cream than anyone should be familiar with. Kozmo makes concessions to local tastes, such as fresh coffee beans and gourmet salsa in Seattle, but local online delivery at this stage is more like a convenience store than a supermarket.

The New Economy: don't look now, but E-commerce—and E-commerce companies—are staging a comeback

EXCEPT FOR XEROX AND FEDEX, few corporate names ever make it into the lexicon of action verbs. The latest entry, however, appears to be search-engine specialist Google, which is now invoked routinely by users of the Internet ("How did you find me?" "I just Googled your name.").

While Google's migration into the realm of public usage may be surprising, it's not nearly as surprising as its migration into the realm of public markets. Google management is expected to take the company public in a deal that could be valued as high as $20 billion.

The underwriting would be the surest signal yet that the retreat from all things Net may finally be over. Of late, commercials for online businesses--not seen for the past two years--have started popping up on television once again.

Such profile-raising is big news in the virtual world. Even bigger news: the recent run-up in the share prices of many dot-corns. During the first three quarters of 2003, the stock price of Ebay Inc., the E-commerce standard-bearer, jumped from $34 to just over $54 (the company also launched a two-for-one stock split). Likewise,

Those spikes--plus the emergence of such lesser-known but thriving dot-corns as RedEnvelope and prototyper Quickparts.com--could have finance executives revisiting their dot-com strategies. Odd as it may sound, investing in Internet projects may make sense again. Same thing for mimicking successful E-business models. Wal-Mart Stores Inc., for example, is gearing up to compete with Internet movie darling Netflix Inc.

Talk of acquiring an Internet company is no longer grounds for institutionalization, either. Consider InterActiveCorp, the New York-based owner of TV shopping channel HSN. The company; which is run by former Vivendi Universal boss Barry Diller, has gone on an E-acquisition frenzy during the past six months, purchasing Expedia, Hotwire .com, and Hotels.com, among others.

Bricks and clicks slow to connect - E-Commerce - retailers using online services to sell product

By the start of 2001, bricks-and-clicks had emerged as the winning business model of online retailing. Traditional retailers, such as Target and Wal-Mart, had proven themselves to both customers and pure-player predecessors with an incredibly successful online holiday selling season. They, along with the survivors of the "dot-bomb" era, helped bring a renewed practically to the alternative sales channel, one rooted in old-fashioned business principles.

But multichannel retailers doing business online had little time to rest on their laurels. Customers had become fairly comfortable with the online buying process and, therefore, demanded a consistent experience in all channels--which posed great challenges for traditional retailers that were ill-equipped to deliver a full range of products. And in as little time as the channel took to gain popularity, bricks-and-mortar retailers went from telling themselves, "Hey, we can do this," to asking themselves, "Do we really want to do this?"

When the Internet economy began to implode, retailers responded by shifting their focus to tighter integration and seamless customer service. Those that had spun off their Internet divisions--such as Staples, Kmart and Wal-Mart--in the hopes of lucrative IPOs, slowly began to reel them back in under the corporate umbrella.

The real headaches of achieving integration and customer service involve streamlining different systems, technology and databases. A typical retailer could have anywhere from seven to 30 consumer databases, making it virtually impossible to recognize a customer across all channels, said Forrester Research retail analyst Carrie Johnson. Smaller tactical issues, such as how to effectively collect customers' e-mail addresses at the store, have yet to be resolved.

Scott Silverman, executive director of Shop.org, the online arm of the National Retail Federation, told the story of how one retailer attempted to solve the problem with a contest to see what store associate could gather the most e-mails at the point of sale. The woman who took first prize won by copying e-mail addresses from her husband's address book. The unsuspecting persons contacted by the retailer were outraged by the rash of unsolicited e-mail promotions.