November 24, 1997
Christmas season hits the Internet with traffic, profits
With Thanksgiving upon us, and December just around the corner, it's clear that the holiday season has begun. And you know what that means: Time to go shopping! Time to face the holiday crowds, the over-decorated malls, the full-to-the-brim parking lots. It's not for nothing this season is often called Stressmas.
Of course, if you're a retailer, the next few weeks look very different: The Christmas season's shopping frenzy promises tremendous revenue streams to those merchants who can capitalize on it.
It's no different online. This year, perhaps for the first time, the holiday shopping season will hit cyberspace in a big way. There are enough online stores now that it's actually worthwhile to log on and try to do some shopping. There are plenty of consumers online -- and this year they're less afraid to use their credit cards than ever before. And it's even likely that cyber-shoppers will encounter traffic of the virtual kind, jostling for limited bandwidth and server time on the most popular shopping sites.
Like their bricks-and-mortar cousins, savvy online retailers are going to make the most of the season. It's a prime opportunity for online marketing, for trying out new I-commerce strategies, and for testing the limits and the scalability of installed commerce systems.
I'm dreaming of an e-Christmas
One such seasonal retailing experiment is the e-Christmas site, at http://www.e-christmas.com. A joint venture by Microsoft, Hewlett-Packard, UPS, Visa, Mastercard, and a handful of other companies, this site offers visitors the chance to buy Christmas gifts online -- or Hanukkah or Solstice gifts, for that matter. The site includes goods from dozens of European retailers, many of whom are getting on the Web for the first time.
In fact, getting those merchants online is the point of the experiment, according to Davis Fields, HP's project manager for e-Christmas.
One of my first questions for Davis was what percentage of the site's total sales went to Microsoft et al. The surprising answer is: Zero. Most of the companies involved (with the exception of UPS, which will realize some revenue from shipping Christmas gifts) get no revenue from the project. They view it instead as an infrastructure investment.
"Companies like HP and Microsoft don't want to be in the Christmas shopping business," Fields assured me. "We want to provide the tools and infrastructure."
I'm inclined to question the long-term truth of that statement -- at least with respect to Microsoft, given their apparent eagerness to get into all kinds of other businesses, including travel, car sales, and the news. But if e-Christmas is part of a grand plot by Microsoft to kidnap Santa Claus and take over the Christmas holiday, at least there's no evidence of that on the site itself.
In a way, e-Christmas is itself a generous present to European retailers and ISPs.
With HP providing server hardware and Microsoft providing back-office servers, the UK firm Xplora built a distributed framework for the e-Christmas site. The site's front page is hosted by a cluster of two high-end HP NetServer LXr Pro servers, linked together with Microsoft Wolfpack technology.
The stores themselves are hosted by one of 21 European ISPs in nine countries. Each ISP has a dual-processor HP NetServer LH Pro running Microsoft NT, plus Internet Information Server, SQL Server, and Site Server.
If a lace factory in Belgium wants to sell doilies to a world market, the company simply approaches its local e-Christmas ISP, which can help set up an online store based on Xplora's templates. Once online, the store is accessible to e-Christmas's master search engine and gift recommendation engine.
Since Europe is several years behind the United States in Internet penetration, this kind of a technology boost is a gift indeed. It will help European retailers get online -- and in time it will increase the number of European end users on the Internet, since it provides those 21 lucky European ISPs with improved servers, software, and know-how.
And, as Fields pointed out to me, "Many merchant companies view this as a means of access to the American market, which most of them haven't had access to until now. As a result, there are no channel conflicts with existing distributors and retailers." In effect, e-Christmas provides European merchants with an instant export business.
So, even though the plug will be pulled on e-Christmas a few days after December 25, its effects will linger beyond the holiday season. And when December 1998 rolls around, those European ISPs might just be able to build their own holiday sites.
Increased hits? Online sales? A chance to build up infrastructure?
What does the holiday season mean for your I-commerce efforts?
Share your thoughts with Dylan Tweney at email@example.com.
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