Slip-sliding away? By Tim Moran, Our Man In Detroit
A Guest Editorial From Eye4Auto's Tim Moran, Our Man In Detroit
There are a lot of ways in the world to say something's difficult to get done. "We're trying to nail Jell-O to a wall here," said one executive, using the famous wiggly brand-named product owned by Kraft Foods to describe just how hard it was to pin down a single process. Harder than diamonds; tougher than boiled leather; more difficult than finding a needle in a haystack.
There are a lot of analogies out there.But when it comes to e-commerce right now, the descriptive lyric of a bittersweet Paul Simon song comes to mind."Slip-sliding away ..."Any business is tough - make no mistake about it. But e-commerce a year ago had the bubbling excitement of a new age; a kind of global commune of ecstatic developers meeting the eagerness of a new cadre of business executives who believed that anything was possible. The new Internet economy meant things would now happen at e-speed; whole industries would become e-enabled and would keep warm over bonfires fueled with the discarded manuals of business-as-usual; the benefits would come and they would be e-normous..
Nine months ago, one could sit in a management conference and hear the excitement of the president of MVP.com as he told his university alumni about the new speed. His alums, many of whom earlier had been wowed with automotive e-commerce presentations from Covisint execs, stomped and applauded the videos of MVP U.S. sports spokes-greats John Elway, Michael Jordan and Wayne Gretzky touting this new content-filled way of marketing.Content and context would now sell sporting goods! Wham! Incredible catalog breadth with thin inventory of expensive durable goods would win the category battle! Pow! Customer-centric focus would unlock hidden values of synergy! Zap! And it would all move at Internet speed - look at the MVP deal with PlanetOutdoors, closed over just a few weeks in August! That's the way new business works!Yeah, we were thrilled in the audience. I'm sure a lot of the MBAs got the fire in their bellies, went back to their automotive offices and tried to kick some serious butt to unlock the hidden values in their inventory chain. If anybody conceived a child that night - and it would take some serious sporting goods to effect that outcome, because according to the analysts anybody not working 22 hours a day back then was going to lose the crest of the Internet wave - that baby today is about to emerge into a world where there is no MVP.com.In November, it missed a $5 million payment. In December, it gave half its workforce skydiving lessons to the unemployment line. And by January, MVP was selling its database, its domain names and maybe the boxer shorts of its executive suite to free itself from e-bondage. Where was the value? Slip-sliding away .
Check with Bruce Bendell and Fidelity Holdings about finding tech value. The car dealership group watched $21.1 million post itself to the "loss" side for 2000, and by late April was trying to divest itself of unprofitable technology operations to concentrate on retail. According to an Automotive News interview, Bendell started as a successful car dealer and "dabbling in technology drained his business of cash."The boys and girls who made big noises about fundamental technology changes that would snatch new value from auto retailing channels have had to keep their eyes open wide the last few months. San Francisco-based iMotors.com closed up with a muffled noise this spring, the seventh online dealership in four months to sputter to a valueless halt or cling to a dunk-tank companion. DriveOff.com announced in February that it was shutting down; CarOrder Inc. ran out of cash in March..
Meanwhile, on the supply side, predictions of value from online auctions seem to have slipped from "killer app" status to "mild apology" when it comes to the marketing world. The catalogs have been posted on the exchanges, and the purchasers agree they're saving 8 to 16 percent on some stuff. But it's items like gloves, toilet paper and dusting compound - not door modules, valve actuators and CVT transmissions. If anybody has failed to notice, few car buyers give a leg up in purchase decisions to the carmaker with the cheapest floor wax at headquarters..
The value boys have moved the shadow play to the next hilltop - follow-the-sun type collaborative engineering is where the real value might come, not that awful and naïve auction madness everybody talked about six fiscal quarters ago. And, really, when it gets right down to it, maybe the value is really in the Employee Relations department, managing health care purchases and insurance pass-throughs. Shame on you for even thinking that online exchanges promised lasting value and market power! .
Slip-sliding away ... pinning down this value proposition is about as elusive as fulfilling the predictions of Esperanto enthusiasts, or bringing about the instant wealth predictions of commodity options indexing gurus.We just heard the same preliminary moaning from the telematics side of the world. Six months ago, selling safety systems was going to be the market driver to unlock the hidden value of telematics for the OEMs. Yes, sir. .
Now, in May, if you tap a telematics expert they will tell you that safety must be a given. There will be limited money in safety, because customers will simply expect it. .
Other things - bigger things, just over the next hill - those will be the killer apps that make the big bucks. Or maybe it will just be in the flow of information back to the OEMs to help them sell their product better.And the systems aren't even truly out there yet, not in any meaningful market percentage. Maybe two million cars have anything approaching a crude, early and "real" telematics system to date. But the expected value's already shifted. One satellite radio supplier, without even being in business yet, has already increased the monthly fee it will charge prospective customers. As an analyst commented, this is kind of a new thing, having somebody announce a price increase for a service they aren't already delivering. Is that better, or worse, than their competitor, which has announced it will stand pat on the price it is charging for service it also isn't delivering yet?.
How crazy are we? I once watched a frozen beef patty do this on a barbecue grill. It had to thaw to cook; but in thawing, it began falling apart. Bit by bit, the ground meat melted, then fell off the patty, through the bars of the grill and into the fire below. It had all the sizzle; it had all the mouth-watering smell of a real cookout. It started out as a delicious picture, but by the time the last shred sprang onto the coals, all that was left was the smoke. Is the e-commerce promise at risk of doing the same thing? The gigantic value propositions keep seeming to fade as we get close to them - slip-sliding away. The nearer your destination, the more you're just slip.
Article written by Tim Moran