MYTH NO. 8: It leads to product commodization. (Myths And Realities of Web commerce Part eight)

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Some disciples of this dogma point to Priceline.com, the site where consumers set the price they want to pay, then let airlines and other suppliers compete to meet that price. Certainly, it's an innovative model that wouldn't be possible without the Web. Online auction sites such as OnSale and eBay have also been successful and have their place for some types of products. But price isn't the No. 1 selling point for most companies online.

Amazon.com and Dell have the most online customers in their industries, and they don't always offer the lowest prices. That's because customers also want brands and service they trust. And they're figuring out that searching the Web to save a few bucks can be no less aggravating than driving all over town for a bargain. Online shopping agents, or "bots," such as Excite Product Finder and MySimon, have their fans, but they can still be frustrating and ineffectual
"In E-commerce, the quality of the participant is more important than ever," says Office Depot VP Gaffney. "Price information alone is very imperfect information. It tells you nothing about reliability, product availability, merchant behavior, or returns and exchanges policies. You might be able to lure online customers with the lowest price, but it doesn't mean you keep them."
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Even in commodity industries, price is only one factor in E-commerce strategies. "Gas and electricity are commodities that we sell online, but there are differentiating things we can do in the E-commerce space," says PG&E's Keast. "We're developing billing information and the ability for a buyer to customize their bill online. Our role is to differentiate the commodity by providing other things around it that add value."

E-commerce is anything but a myth. It's a major trend that's reshaping businesses and the IT that runs them. But there's a common theme that runs through each of the myth dissections above: E-commerce, in almost all cases, doesn't change some fundamental rules of business.

Doing business on the Web successfully takes capital, innovative leadership and execution, marketing savvy, perseverance, and the intelligent application of IT. As the Internet continues to speed the pace of change in the coming years, many aspects of business will be altered and transformed--but those guiding principles will always remain.
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