E-commerce Boom Unleashes Boundless Opportunities
"It's a great way for confectioners to expand their customer base, build their brand, and get to know their customers better," says Rani Aliahmad, cofounder of eCandy.com Inc., a webbased e-taller focused exclusively on the confectionery market. "Candy is a viable opportunity and we see the market growing very fast," he says.
Just as web sites were created at an unstoppable pace worldwide within the last few years, e-commerce sites are following suit. Although a web site by definition, e-commerce sites have a transactional nature that allows users to buy goods online.
As more and more consumers log onto the Internet for their shopping needs, online shopping does not appear to be a flash in the pan. "We are well beyond the proven stages. E-commerce sites are growing very rapidly. They are doubling, tripling, and quadrupling in sales. Sometimes the percentage of growth is off the chart," says Ken Burke, president and CEO of Multimedia Live, a full-serve Internet technology company that specializes in creating e-commerce solutions.
"E-commerce is absolutely positively, unequivocally here forever. It is a better way of shopping, and it has changed our lives," says Burke.
What perhaps is the biggest factor that draws consumers to the Internet is convenience - with the click of a mouse, a gift wrapped box of chocolates can be delivered within 24 hours.
"More and more people are having less and less time to buy gifts for their loved ones on holidays and special occasions. E-commerce provides them a competitive price, a wide selection, a convenient way to shop, and access to hard-to-find items," says Aliahmad. "Essentially, we make their life easier by providing a wide selection."
The confectionery industry is well suited to the online world, particularly for gift-giving shoppers. "The target market for the confectionery industry is not impulse buyers, but the gift giving audience. It's for people who are planning to send a gift to someone. They are price sensitive, but don't want to waste an hour to go the store," says Aliahmad.
"Candy is a perfect product to be sold online," agrees Don Teague, vice president and co-founder of Uptime-- One, a provider of e-business software and solutions for dot.com and midsized companies. "Flowers, candy, and these types of gifts lend themselves nicely to the Internet, and the numbers are proving it," he says.
Indeed, 1-800-flowers.com, which went online in 1992 and sells both floral and non-floral gifts such as candy and leather pens, generated $52 million-plus in revenue from its site last year.
Although it is becoming more competitive, online candy commerce is nowhere near reaching its full potential. Unlike the online floral market, some argue that the candy industry is just beginning to scratch the surface. "Candy manufacturers are probably further behind other industries simply because it's a low priced consumable," says Burke. "But t believe that consumables are much bigger in terms of money makers than other types of businesses. Once candymakers find customers and create loyalty on the web, they will find success.
"In the next three to five years the biggest trend, in my estimation, is that manufacturers will be the big winners because they control the product. As soon as they learn how to be direct marketers, they will control the margins and can service customers," he says. In order for manufacturers to achieve longevity in the virtual world, they must create successful e-commerce sites. A complex venture, the goal of e-business is to draw and maintain visitors through superior customer service. From dynamic web design to effective marketing and efficient infrastructure, e-commerce represents more than any other avenue to build sales.
"The Internet is much more than just selling product, it's a whole new way of interacting with the consumer," says Aliahmad. As diverse as the range of sweets produced by confectioners, so are their ecommerce needs. Some local, regional and international companies are utilizing the Internet as a platform to push their brands.
"The great and interesting thing about the Internet is the selection available. The e-commerce venue expands the scope of products and selection from the biggest to the smallest manufacturer," says Aliahmad. "Not all manufacturers are represented in the marketplace. The consumer only sees what the grocer or retailer puts on their shelf." The Internet does not discriminate between company size, but rather provides a platform for success if taken advantage of properly. "You don't need to be a multi-million dollar company to succeed in e-commerce. Actually, the smaller companies should embrace the Internet because it's a great way to get the word out," says Aliahmad.
In addition to increased exposure and in turn, higher revenues, e-commerce provides a unique communication forum for those seeking more knowledge about their consumers. Says Aliahmad, "Selling product is one thing, but sites should also provide feedback on consumers, and tell them how their product interacts with consumers and retailers.
"We gather a lot of information on consumers that buy from our site, and although we keep their personal information private, we share the general demographic information with manufacturers." As a result, manufacturers gain valuable insights into what type of users are buying their product, why, and on what occasions. For Nestle USA, this was a primary reason it recently partnered with eCandy, says Aliahmad.
"Nestle was relying on IRI data for information on consumers and their habits. IRI data is very raw, and it doesn't provide depth in terms of consumer demographics. So they saw us as a great platform to get information from consumers so they can be more aggressive in the market," he says. In addition, e-commerce sites such as eCandy offer live chat rooms as a way to facilitate a touch point between consumer and candymaker. "Consumers haven't had a venue where they can voice their concerns, interests or ideas to manufacturers. Many people who come to our site are very interested in giving their feedback about candy. They see us as being the authority or the platform to voice their concerns," says Aliahmad.
"It also provides manufacturers with a great and simple way to test new products with a very captive audience who will be more than willing to share their information," he adds. Whether companies view e-commerce as a platform to increase brand awareness, or gain more consumer information, "the most common underlying aspect is that they view the Internet as a way to increase sales only.This is not the best way to look at it," says Aliahmad. "The online and offline consumer are very different. Online consumers are not looking just to buy, but they are looking for the experience," he says.
Although competitive pricing is important, sites need to offer much more in order to become a destination for shoppers. "The people who compete on price are those with short-term vision. Companies who are only price sensitive will be dropped when someone else brings another price," he says.
"The customers that are tied to the customer service experience are going to be loyal and repeat customers. You must make sure that your customer service is up-to-date, and interacts in a great way with the consumer." As with anything that relates to the Internet, its fate lies with the users. "People's habits don't change overnight," says Aliahmad. "The Internet is not a revolution, it's an evolution."
Hopefully, it will be a evolving for years to come.
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