McIlroy–Where Are We Going On the Web?
But while the printing industry remains unaffected by the Web, the same is not true about several other industries. According to Dell Chairman and CEO Michael Dell, who addressed his annual meeting in July, sales of Dell computer systems on the Internet grew year-to-year from $1 million per day to $6 million per day. That’s over $2 billion in annual sales, roughly one-third of Dell’s total. Also, Amazon.com has become a fast-growing book retailer in America, and one of the largest.
So obviously some industries have been affected enormously by the Internet. How can we categorize them? One factor is that high-tech products appear to be amenable to Web marketing, partially because the audience for these products is technologically sophisticated and willing to buy over the Internet.
The next factor is the commoditization of the product. A book is a book is a book. The major differentiation in book retailing in the last few years has been the scope of available inventory (hence the growth of the superstores) and price cutting (which every retailer has been forced to do).
Amazon.com moved into this space and was able to take advantage of inherent aspects of the Web to offer the widest possible inventory at competitively low prices (not necessarily the lowest). The company has been a runaway success from day one, and arguably is reshaping the entire publishing business.
That’s all well and good, I hear you saying, but why should I care?
The questions to address regarding the printing business are: (1.) What market changes are already afoot? (2.) How can the Web facilitate these changes?
While it wasn’t true five years ago, it can now be said that the average print buyer is relatively technologically sophisticated, and presumably is willing to consider using the Web to transact business. There are some holdouts, but let’s just assume that the average buyer would be willing to obtain prices and place orders via the Web.