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A companion Web site gives you updates and links to other sites offering the latest information on the state of wireless eCommerce
Practical,Profitable Techniques to Secure a Stronghold in the Wireless Revolution
Wireless Web services are changing the way businesses and consumers interact with the Internet,with the marketplace,and with each other. The Wireless Web reveals in clear,non-technical language how you can develop and execute wireless strategies that complement your existing business efforts,strengthen relationships with your best customersand capitalize on the many possibilities in today's wireless technology revolution.
Praise for The Wireless Web
"Bryan Bergeron's book The Wireless Web provides a thorough and well-researched overview of the complex technological landscape surrounding the mobileInternet. The book also provides advice on how an enterprise should embrace these emerging technologies to competitive advantage. "
Steven Peck Worldwide Program Manager,Mobile Financial Services Hewlett Packard
"Mr Bergeron compellingly captures the essence of the tremendous opportunities which result from the 'untethering' of the Web through wireless technologies,and then goes on to provide solid how-to advice to the executive seeking to build business around those opportunities. I recommend it highly. "
Richard Bravman Senior Vice President GM Wireless Systems,Symbol
"The Wireless Web is a valuable guide for those participating in the race for the 'Wireless Wallet. ' This book will help executives understand the core technical and economic constructs behind this vision. "
Jim Balsillie Chairman and Co-CEO
Research In Motion
"The Wireless Web is a practical,solution-oriented book,with just enough technology to allow an intelligent decision maker to make an informed choice. It provides an overview of the most relevant technologies in enough depth for the reader to understand the business implications of the technology. "
From the Preface
The marriage of the Web and wireless communications technology impacts virtually every business on the globe. The Wireless Web reveals how it impacts your business,and explains in clear,easy-to-understand terms what you can dostarting todayto help your business gain access to the growing pool of wireless Web customers.
Written for non-technical executives and managers,The Wireless Web details how to take advantage of wireless Web possibilities in a clear,straightforward manner,explaining the key concepts and technologies involved. For ease of use and reference,this introduction to "the next big thing" in the world of eCommerce is divided into three sections:
For both business and personal applications,wireless technologyalready firmly entrenched in Europe and Asiais just now making its mark in the United States. The Wireless Web explains how wireless technologies will change our entire business environment,and how companies of every type,in every arena and industry,can begin now to build the necessary foundations to take advantage of this exciting new competitive tool.
...was written for non-technical executives and managers who need to get up to speed, as quickly as possible, on this "next big thing" in the world of eCommerce...
|1||The Ether World||3|
|2||Evolution or Revolution?||25|
|4||Network and Wireless Technologies||73|
|5||Cellular Communications and Protocols||99|
|7||Realizing the Potential||173|
|8||What's the Holdup?||195|
|9||Timing Is Everything||235|
As a youth at the turn of the 19th century, an oyster fisherman worked from sunrise Monday morning to sunset Friday night. Around 3 a.m. on Saturday, he would load his catch onto a large skiff and head to the fish market in town. Although he and his father had a relationship with the owner of the fish market, they always debated the quality and price of the product. With oyster knife in hand, the fish market owner would sample the oysters and state his price. On a good day, a barrel of salty oysters and 15 minutes of haggling fetched 50 cents. On a bad day, the same 15 minutes might yield only 35 cents. Regardless of the transaction details, both the oyster fisherman and the fish market owner parted with the full expectation that they'd be doing business again in one week. They had a relationship that was built on years of short, intense, personal transactions.
From the oyster fisherman's perspective, the time he spent in the actual business transaction was insignificant compared to the time he spent hauling oysters from the brackish waters in southern Louisiana and then transporting them to market. As a producer, he felt that selling was simply the final step in a long, arduous process. He didn't have time to consider his role in the value chain and what might happen if the fish market owner refused to buy his catch in favor of that of another fisherman who might accept a lower price. The oyster fisherman and the fish market owner had an unsigned deal-a relationship-that virtually guaranteed security for both of them.
From the fish market owner's perspective, the oyster fisherman was probably a normal, welcome part of his Saturday morning. After 15 minutes of haggling and another 15 minutes of the fish market owner's watching the oyster fisherman unload a dozen barrels of oysters, the oyster fisherman was gone. The time the owner invested in the relationship was the time spent transacting business. It was an efficient use of his time. Of course, it wasn't as simple as that. If the owner didn't at least satisfy the oyster fisherman's need for capital, he might have to invest time finding another reliable source of oysters.
It turns out that their relationship lasted over a decade. The demand for oysters declined and the oyster fisherman shifted to the more lucrative shrimping industry. As captain of a shrimp boat, his main concern was maximizing his weekly catch while managing a crew of six. He no longer dealt with sales; a salesman representing the shrimping cooperative negotiated with the big freezer companies for the best price. After another decade, faced with dwindling profits and fierce competition from shrimp producers in Mexico and Taiwan, the oyster fisherman graduated from hauling ice and shrimp to managing tugboats that transported drilling equipment to offshore platforms for multinational corporations.
Through the course of his work career, the oyster fisherman became involved in longer, more complex value chains. He advanced from delivering a product with a measurable quality to a service that was difficult to quantify. He moved from dealing one or two levels up from the end-consumer to dozens of levels up from domestic and international consumers. The oyster fisherman never experienced the Web, but his career illustrates a number of points relevant to the Web.
It's fashionable to speak of things happening in Internet time because processes on the Web simply occur faster than in the physical world. Instant communications and gratification are not only possible, they are expected. It's as though, as a species, business has been transformed from a lumbering elephant, which lives seven or eight decades, to a sprightly fruit fly, which experiences an entire life cycle in less than a month.
The Web, like the telephone and the microcomputer, is really a time machine. Just as FedEx is a modern version of the transporter from "Star Trek," capable of moving objects from one point on the planet to any other point in about a day, the Web compresses the relationship building-sales cycle. A three-second sequence of mouse clicks can replace a one-or-two hour business meeting. Because of the ease and rapidity with which symbiotic relationships can be established, there's little motivation for either side to develop loyalty toward the other. Or is there?
Several factors affect the Internet business relationship: trust, is one factor. Each side assumes that the other will abide by the agreement to exchange goods, services, or money. Trust doesn't have to go very far if the business transaction involves trading a barrel of oysters for a few coins. Both sides get what they want out of the exchange or the deal is off. But consider a business transaction for services, such as a one-month contract for house cleaning. A service, unlike a physical object, is difficult to quantify objectively. If a customer isn't satisfied by the quality or timing of the service, there may not be any recourse against the supplier other than simply not using that supplier again.
To quote a sales cliché, "The fear of loss is greater than the prospect for gain." Or, as Spencer Johnson says in Who Moved My Cheese?, "The more important your cheese is to you, the more you want to hold on to it." We-buyers, sellers, and bystanders-fear the unknown. This universally human trait provides the psychological basis for cultural development, patriotism, and loyalty. Since we are consumers in the service industry, this fear of the unknown also fuels our desire to stay with a service provider that has performed admirably for us in the past. Presumably, service providers appreciate the money paid to them for their services. However, if they're in demand, they may not be as attached to the consumer as the consumer is to them. When the world is full of clients willing to pay for a service, one client is just as good as another.
Another factor in relationships is control. If one side can walk away from a relationship, and the other side can't or won't, the side that can walk away controls the relationship. On the Web, where so many product and service providers are only keystrokes away, control of the relationship is clearly in the hands of the consumer. According to Fisher and Ury in Getting to Yes, consumers have a better BATNA-a Best Alternative To a Negotiated Agreement. If the deal doesn't work out-if a seller doesn't meet a price point, for example-the customer can click to another eBusiness in a half-second. This scenario assumes that providers are numerous and largely undifferentiated.
The BATNA view of relationships suggests that the time invested in a relationship affects our decision to stay in a relationship. It's one thing to drop someone after one date and another to walk out after living together for a year. If a person has invested significant time in a relationship, then walking away and starting the process anew with someone else isn't very appealing. At least the time investment in an ongoing relationship is known. Starting anew, trying to develop another relationship, often has an unknown time commitment. Time is the most precious commodity on the planet, and no one wants to spend it unwisely.
In an ideal environment where customers find an eBusiness strictly at random, market share can be calculated as the number of potential customers divided by the number of eBusinesses on the Web. In the real world, the process of creating business relationships isn't random, even on the Web. The entire focus of marketing is to make the process of a customer's locating a supplier as non-random as possible, in favor of the business behind the most aggressive marketing effort. Establishing a brand with a positive or negative image, for example, significantly upsets the randomness of the Web. A customer is likely either to search out or avoid a particular eBusiness, based on perceptions of the brand. Similarly, although geography and physicality are irrelevant concepts on the Web, the Web equivalent of prime real estate-a short, catchy URL-can have the effect that a multi-million-dollar storefront in a prime location has on sales in a brick-and-mortar business.
Brand aside, a basement eBusiness startup with a Web designer who has an eye for graphics and a programmer who knows her way around active server pages is on equal footing with a 100-year-old multi-million-dollar brick-and-mortar corporation-at least from the perspective of eConsumers. Of course, when an established business with a known brand decides to establish a presence on the Web, the physical business can give the eBusiness instant credibility.
For example, the Gap's click-and-mortar Web site (www.Gap.com) is an online extension of the Gap chain of retail outlets. The Store Locator function allows anyone to locate the nearest Gap retail outlet. In addition, as the Web site boasts, Gap.com is about ease. A customer can order a garment from the comfort of her home. If the item doesn't fit, she can bring it to any Gap for a refund or exchange. Gap.com is also up front about collecting consumer information. A disclosure statement on the Web site states that the company maintains records of product interests, purchases, and whatever else might enable it to enhance and personalize a consumer's shopping experience.
Consider two eBusiness startups, neither one of which initially has a physical business presence. What is the differentiating factor that will successfully upset the randomness of customer hits in favor of one of the businesses? Given equal advertising and marketing budgets, it won't be brand development, unless perhaps one business has a great Web address and the other doesn't. All other factors being equal, the difference will center on customer stickiness or loyalty.
How to cultivate loyalty in the customer base is the most critical issue in a successful eBusiness. A loyal following is also important in a traditional business, but it's not as essential as in eBusiness because of practical physicality issues, such as storefront location and prospect for walk-in business. A customer is likely to continue to visit the corner grocer, even if there is a better product or service available elsewhere, simply because the store is on the way home.
As eBusinesses become smarter, the metrics of success are less about hits and more about transactions. Having visitors drop by an eBusiness is necessary but ultimately not the crucial condition for a thriving eBusiness. What's important is how many of those customers actually complete a transaction. It doesn't matter how long or often a customer visits a site if, in the end, he or she doesn't buy. On the Web, a little less than half of the adult shoppers are also buyers.
Of the four main distinguishing characteristics of a business-price, place, product, and time-the Web has yet fully to address time. For example, while customers may use the Web to look up books on Amazon.com, if they need the book immediately, they'll probably walk two blocks to their local Barnes and Noble to purchase it. Although customers may consider themselves to be loyal to Amazon.com, practical considerations often dictate that they forgo loyalty in order to save time. The point is that the eBusiness world isn't a fish tank; the brick and mortar malls are still doing very well.
Attracting customers to a Web site is still important; in fact, it's critical. One of the hottest areas of Web technology development, from an "attract the customer" perspective, is 3-D. The increasing availability of high-bandwidth DSL and cable modem Internet connections, together with affordable 3-D software, is making realistic product renderings the new "must have" of the month on the Web. The Sharper Image (www.SharperImage.com) site uses 3-D to create an online version of an actual shopping experience. Shoppers can manipulate products, such as a waterproof CD Player, which have been modeled in 3-D. Sharper Image's Web traffic is up several hundred percent since the introduction of the 3-D animation, and customers spend considerable time viewing the 3-D objects. This extra time spent shopping presumably translates to more sales, either through the Web, a Sharper Image storefront, or through the mail-order catalog.
Lands' End® (www.LandsEnd.com), the catalog clothing retailer, is using 3-D technology to help female shoppers visualize an outfit on them. Potential customers create a personal 3-D model that approximates their figure, face shape, hair style, and skin tone. With the model, shoppers can experiment, discovering which garments enhance their body type. For example, a blouse with wide horizontal stripes might look great on a sleek model, but altogether different on a voluptuous figure. Like a virtual Barbie doll, the model can be dressed in a variety of garments and then viewed from multiple angles.
In creating their 3-D surrogates, customers have a choice of filling out either a Quick or a Detailed questionnaire. The Quick questionnaire requires qualitative information, such as small, medium, or large shoulders, hips, waist, and bust. There are clearly labeled buttons for selecting hair style, hair color, skin tone, and face shape from a palette of icons. The Detailed questionnaire requires exact body measurements, including height, arm length, and rise. With this information, the Lands' End site can suggest outfits and general style advice. For example, for a woman with medium shoulders and a large bust, the system suggests avoiding double-breasted jackets.
Lands' End also offers a functional Lands' End Live!™ feature on the Web site that allows customers to talk directly with a customer service representative while shopping on the site. Customers with a second phone line can talk with a customer representative by phone. Those with a single phone line who are comfortable with email can have a live chat session with a customer service representative. When a customer chooses the telephone option, he can enter his phone number and a customer service representative will call him. The only information customers have to add is their first or last names. The Lands' End site also makes it easy for customers to track their orders.
At the end of the eBusiness shakeout, the winners won't be those with the coolest graphics or catchiest marketing slogans. The winners in eBusiness will win by providing outrageous service. eBusinesses that want to attract paying customers, not window shoppers, will focus on what matters most to customers: service. Customers expect prompt, courteous, personalized service. With intensified competition and uncertain brand loyalty, successful eBusinesses will focus on developing and maintaining excellent customer relationships.
Customization and personalization are generally easier on the Internet than in the physical world. For example, instant messaging, popularized by America Online, allows online consumers to request on-line customer assistance. Alternatively, a customer service representative monitoring the site for visitors may initiate the interaction, just to let the customer know that online assistance is only a mouse-click away.
Although humans are the gold standard as dispensers of quality customer service, they can be expensive, and aren't always available or in a good mood. One of the technological alternatives to human customer service is to use Intelligent Agents. Consider booking an airline reservation with the aid of one of these software programs. An agent can be programmed to find, for example, flight times and ticket prices at various airlines, saving the consumer time and money.
An intelligent shopping agent serves in the same capacity as human travel agents do with the airlines. As such, these agents are poised to become the primary interface between customers and suppliers, with the businesses that create and maintain the agents reaping most of the benefits of the transaction. The issue isn't whether agents and other software tools should or will be used, but how the technologies are implemented. As intelligent agents and other tools become commodity items on the Web, the real winners will use agents and other technologies in a customer-centric manner, with a goal of building customer loyalty.
Consider the parallel "real-world" situation with a human travel agent. Even though anyone can make reservations directly with airlines via the phone or on the Web, many customers prefer to use a human travel agent. Why use a human agent, with so many free alternatives available on the Web? One reason is that it's faster. The other is loyalty. Many customers don't feel loyalty to the airlines; the airline selected by their travel agent is usually insignificant, as long as it's one of the major carriers, and there hasn't been a major crash in the carrier's fleet within a week of the intended flight. The loyalty is to the travel agent, not the travel agency she works for, and not the airline.
Unfortunately, thousands of shoppers who opted for the e-solution to their shopping challenges were without the expected FedEx boxes of toys as Christmas approached. During a frantic two weeks before Christmas, their phone calls to customer service representatives produced stories ranging from "FedEx was unable to deliver to that zip code," to "I'm sorry, we're out of stock on that item." These shoppers ended up in the malls on Christmas Eve.
For their troubles, customers were offered a $10 gift certificate and a "come back again real soon" pat on the back. Clearly, the customer representatives for the online toy stores just didn't get it. The primary reason that thousands of customers chose an online toy store over the malls was to save time and avoid the hassle of shopping. Unfortunately for those eBusinesses, many customers have no intention of ever using their services again, $10 bribe or not. What the customer service representatives didn't understand was that many customers were willing-happy, even-to pay a premium for the service that the online toy store advertised. That eBusiness lost potential customers-forever. In addition, these customers may be hesitant to use an eBusiness toy store in the future, for fear that they'll be in the same predicament again.
The principles most relevant to our discussion of eBusiness are: outsourcing to the customer; auto-cannibalizing markets; treating each customer as a market segment of one; and, perhaps most important, from the perspective of Emotionally Intelligent Interfaces, replacing rude interfaces with learning interfaces.
As an example of outsourcing to the customer, consider the Web-based FedEx tracking system, which allows customers to obtain tracking information on their packages without involving FedEx staff. Not only are fewer FedEx employees needed to cover the customer service lines, but customers can view tracking data on a 24/7 basis. Motivations for outsourcing are numerous; there may be an economic incentive for customers to do some of the work. For example, many travel agents charge $20 to issue a domestic ticket. However, anyone can log on to the Web and reserve the same ticket directly from the airlines without the $20 charge.
Auto-cannibalizing markets refers to a company's treating its legacy operations just as its competitors do. If a company can do a better job using improved methods, Downes and Mui suggest that it toss its old operation and start on the new one before someone else does. This isn't to say that a company should raise its new multi-million-dollar facility to modestly improve production efficiency. However, if a company recognizes an advantage to offering some of its products on the Web at a discount, then it should do so, even if this cuts into brick-and-mortar profits. It's better for a company to do the cutting instead of having competitors eating away at its profits.
Treating each customer as a market segment of one is a call to customize products and services to suit individual customers. The Web can be used to capture data of sufficient granularity to predict, with good accuracy, exactly what customers want. The trick is using the data to make intelligent decisions.
Any human-human interaction has the potential to become rude. That is, if a customer representative is having a bad day, all of his or her customers will as well. One solution to this potential problem is to provide electronic interfaces for customer interactions. The advantage of this approach is that the eBusiness maintains control over the interface. The challenge, of course, is to make the interface great, not merely good enough to replace a questionable customer service representative. It's not enough automatically to capture customer information and instantly provide relevant responses based on this information. A great learning interface gives a sense of humanness, of empathy, and of customer advocacy. In other words, the interface should be emotionally intelligent.
Today, the only thing constant is change, and that rate of change slows no signs of diminishing. Our grandchildren will look back on this period, when everything happens in "Internet time," just as we look back on the oyster fisherman's time-slow, imprecise, impeded by lack of communications, with both suppliers and buyers separated by layers of bureaucracy.
Technology-enabled business is in its infancy. Our Web, fax, cell phones, and PDAs will seem as antiquated to our grandchildren as an old Marconi wireless system does to us. Those old wireless systems of early radio were used with Morse code to take full advantage of the limited bandwidth of the newly tamed ether. We are still in the process of taming communications at all levels in our society and in business, and we have a long way to go. Technology will help get us there as long as we are ready and willing to accept and promote change in how we perceive and do business.
Regardless of the short-term fate of the Web, eBusinesses with a competitive advantage will be here for the long term. While short-term goals of attracting customers are critical, what really matters in the valuation of a company is steady growth. The winners in eBusiness will be those who provide consistent, highly responsive customer relations by developing customer loyalty.
Posted June 11, 2001
Many people have been impressed by what they have seen of the new wireless services in Europe and Japan. Based on the promise of these offerings, wireless operators have spent billions of dollars for 3G licenses in Europe that will require tens of billions to implement. Based on the amount of money invested and planned for the next few years, it looks like the days of broadband wireless Internet are about to be with us. What should you be doing now? That's the question that this book addresses. The Wireless Web is the best book I have seen for describing the background of how technology and customer needs are converging to provide new wireless offerings and the potential for new ways to solve problems. About two-thirds of the book is aimed at providing a layperson's description of technology, social, and governmental developments that will influence what will be offered by companies. The remaining third gives you a template for thinking about what these developments mean for your business. For most people now, that decision will relate to when to get involved. In my consulting practice, it is clear that there are enormous opportunities now to develop intellectual property and new business models that can be implemented immediately. For those who mainly want to use the wireless web as an adjunct to their businesses, on the other hand, you have lots of time. The best advice in the book is to be sure that you have the business processes in place that will allow you to connect wireless technology to your business when the rest of the infrastructure and equipment are in place. Basically, wireless Internet connections will become more important as a disruptive technology than the land-wire connected Internet. By always having a device present (whether a cell phone, personal digital assistant, pager, or some new device), individuals will be able to simplify their lives while they are on the go or in any fixed location. As a result, transactions will be transformed. For example, food manufacturers may have to bid for a consumer's business while she or he is walking down the aisles of a supermarket. For the first time, you will be able to shape the entire consumer or customer experience around what that person prefers. The potential for positive differentiation becomes enormous, as a result. My main caution to you is that this field is rapidly changing. This information will become out-of-date rapidly. So read the book now if you are going to. After you have considered some of the ways that the wireless Internet can improve your offerings, I suggest that you go back to the drawing boards to see how much of these changes you can offer now without broadband wireless connections. In this way, the wireless Internet can be a powerful metaphor now for improving your performance. Be helpful . . . all the time and everywhere! Donald Mitchell, co-author of The Irresistible Growth Enterprise and The 2,000 Percent SolutionWas this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.