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The future of e-commerce will be shaped by a new generation of companies that can consistently deliver convenience, information, entertainment, and savings -- an as-yet-unrealized package that will have an impact summed up by Priceline.com founder and vice chairman Jay Walker in one word: "Wow."
Walker, who was invited by the student-led High Tech and New Media Club to speak at the School in March, equated the changes brought about by the Internet with the transformational effect the automobile, the telephone, and television have had on the U.S. economy and culture.
According to Walker, online stock trading and online auctions are the few places in e-commerce that approximate "wow" today. Noting that 30 percent of all securities trading is done by individual investors online, Walker said that the Web has turned the securities business upside down by providing online convenience, information, and savings. "An entire industry imploded," he asserted. "Now the industry is driven by the retail marketplace. And [online traders] are having fun." Indeed the "fun," or entertainment value, of e-commerce cannot be underestimated. "Even the front page of the Wall Street Journal has to be entertaining," Walker said.
Priceline.com, a consumer-to-business Web site launched in 1998, sells groceries using the same "name your price" scheme it uses to sell surplus airline tickets and hotel rooms to travelers. Online shoppers are treated to a computer-generated slot machine that virtually determines whether or not they get the items in their market basket for the price they are willing to pay.
The e-commerce companies that consistently deliver savings to their users will be the biggest leaders. "If it works, you havea Wal-Mart," Walker said. Although Wal-Mart may not be the most convenient place to shop ("7-Eleven is more convenient, but it doesn't have the retail share Wal-Mart has"), the discount retailer gained market supremacy by proclaiming, and delivering, "always the lowest price" -- typically by wringing out every possible cost factor in the supply chain.
"If consumers can save money, and suppliers can make money," Walker concluded, "then you have the future of e-commerce."
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