Ever see the movie Avalon where the members of a prototypical 1950s family huddle wide-eyed around their first television and watch a still image for hours because there aren't any programs yet? (Before this, even, people used to listen to radio static.) Who would believe that the same tube that brought us that blur of electro-fuzz would later bring us true-to-life explosions, car chases, even computer-animated ants! Now apply the same scenario to the Web, only consider that Internet usage is growing faster than any other communications technology in history, including radio and television.
"If your customers aren't asking for this yet, be grateful," says Jack Shaw of Electronic Commerce Strategies, which provides educational and consulting products and services in the field. "You may still have time to plan for and implement e-commerce. If your customers are asking for e-commerce, it's already too late. Most will never ask for it. They'll just take their business to your competitors who already have it."
Still feel lost? Here are some ideas to make sense of the buzz:
Reaching the customer "As I see it, the Internet is an awareness tool," says David Griffith president and CEO of Bristol, Pa.-based Modern Group. "It's where in a 24-by 7 space, you can get the most information about you and your goods across to the customer." Many rental centers have at least figured this much out - if they create a Web site, they can significantly extend their market reach.
But e-commerce has more to it than the text-heavy scroll page, and Griffith has been quick to pick up on the advantages of an e-commerce strategy. Maybe that's because he was an executive with IBM and MCI before coming to Modern Group in 1992. He calls his Web site, www.moderngroup.com, "a critical gateway" for customers who can find answers to questions, and phone numbers and e-mail addresses by branch and by product. In addition, the Modern Equipment Web site allows customers to place parts orders and fill out credit applications. Griffith sees this as another strategy to give the customer what he or she wants.
"A lot of our customers are already there, so I think [the Internet] is a logical way for us to reach them," Griffith says. "The Internet is just another channel of distribution, like direct sales or walk-ins, but I don't think it will ever be 100 percent because sometimes you need to touch your customers. I don't know that I want to take a rental order cold over the Net because face-to-face you really have the opportunity to rich the sale up. Also sometimes a guy will come in, and he'll want to dig something, but he has no idea what to use; this requires personal attention. But with a familiar customer you can really expedite their request [using e-commerce capabilities]."
Jeff Cummins, director of marketing and sales for RSC, which has already developed an extensive e-commerce strategy, also says that human contact still has a place: "E-commerce is a great tool for merchandise and used equipment sales. But in terms of people helping other people determine what their needs are, they like a human relationship. It's great that national accounts can see what they're branches are renting, but I don't think e-commerce will supplant person to person contact with the local store because that's what people want - personal contact."
While e-commerce may not take over all business practices, it certainly has its incentives. Including the fact that companies that utilize the Internet are expected to save up to $103 billion by 2003, according to the Associated Equipment Distributors report. In turn they can pass their savings on to customers. Wayland Hicks, vice chairman and COO of United, says: "We believe that (e-commerce) must be happening in the future for us to be the most cost-effective supplier in the industry."
Saving time As a tool for customers, e-commerce allows a rental center to post its inventory availability, order status and detailed equipment information on its Web site. Customers can do credit reports, make payments and request parts online. Rental centers can pay manufacturers and make bank transactions electronically. The Internet is also turning out to be a great place to unload or buy used equipment through an auction format at sites such as www.point2.com and www.bigequip.com
All of this can provide significant time savings for rental centers and manufacturers by reducing paper work, data entry and valuable human time. "I want to eliminate paper from our processes," says Hicks. "I want to have an electronic warranty system, online invoicing and electronic downloading of parts databases."
"The precious resource right now is not money," says Steve Paradis, president and CEO for Ironmax.com, an equipment procurement, sales and management Web site. "I think the real element is time. People are looking for time enhancements - it's just a smokin' area in business. Every contractor wants to save an hour in his day."
In a complete marriage of e-commerce and the rental industry, Ironmax.com launched its site www.ironmax.com last month. In a forum for equipment buyers, renters and providers, customers can describe when, why and what they're looking for to registered rental centers that then have the opportunity to bid for the business. In reverse, the site is a source for rental houses that want to sell or buy equipment all through the same format. Bids can be made and responded to 24 hours a day, 7 days a week.
Manufacturers see the need for speed as well. "Rental customers want rapid in and out," says Bill Seidel, director of sales for Case Corp. "They want access to equipment on a phone call basis, so through an online connection with the rental center, customers should be able to order parts, reserve equipment and get the service they would normally get."
Improving data management A significant asset of conducting business online is that a rental manager/owner can automatically archive information into a computer or Web-based database. Rental Service Corp., Scottsdale, Ariz., compiles helpful information for its customers and lets them view it on their controlled-access Web page. With a log-in and password, they can inquire about equipment on rent, available credit and billing history through RSC's Web site. Sales reps are also tuned in by hand-held computers, which they can use to share information such as job site leads, equipment availability and account profiling.
Ironmax also hopes to provide significant help in the area of fleet management. "We provide substantial pricing trend information," Paradis says. "This is powerful information that every contractor wants to know, and it's powerful to rental houses and dealers because it lets them establish fair market rental rates and it tells manufacturers or investment bankers if prices are firming or sliding. Think of how useful those American Express reports are because they show you clear as day where your money is going. That's what we can do for rental centers."
A recent report by the Construction Industry Manufacturers Association also hails the significant advantages of data-driven Web sites. "A company's Web site must serve prospects, distributors and other key audiences, each with different needs," says Chuck Frey, strategic information director. "And they'll soon want a greater depth of information and data. They will also want to customize, or filter, their view of your site's information to fit their needs and avoid information overload."
Seeing through the static But this is just the beginning. Someday rental centers will offer in-depth needs analysis to match the appropriate piece of equipmentfor a job. Home Depot already has a version of this on its www.homedepot.com site. Geared toward the homeowner, the site provides a variety of step-by-step directions along with pictures of how to do things like lay out garden beds, plant trees, build walls, fix plumbing problems, and install cabinets, counter tops or hardwood floors. And of course, Home Depot, along with its "free" advice, suggests just the right tools and materials to complete the project. Several rental centers are already experimenting with this approach by providing instructions with suggested tools for rental.
Someday, too, it might happen that a contractor could share extensive job-site photos via teleconference with a rental center in order to find an appropriate piece of equipment to rent. The order then would be processed online and the equipment delivered within a few hours. A piece of equipment malfunctions on the job site? No problem, a customer can talk over a laptop to an online mechanic who can supply him or her with visuals on how to fix it. A manufacturer could do the same for a rental center's mechanic. Buy a new piece of equipment by partaking in online bidding and then virtually steering a virtual wheel loader. Pick your job site condition and see how it handles. Take a peek under the hood with the click of your mouse. And these are a few of the new online opportunities. The real possibilities, of course, are endless.
"AOL buying Time Warner is just the beginning," says Mark Musgrove of Tejas Equipment Rentals, McAllen Texas. "We'll look back at that as the beginning of a new economy, shifting to an Internet economy. E-commerce will be our standard way of doing business. We'll be putting instructions on the Internet. We'll be talking to the customer on the phone and at the same time showing the equipment on the Internet. This will happen in the next two or three years."
These developments, along with many others, could happen faster than that, as the rate of Internet growth has rocked even the e-industry gurus' wildest projections.
More simply, as Paradis says: "Get ready to get wired, baby!"
While 91.7 percent of AED members say e-commerce is a useful tool for advancement, for reducing costs and errors, and for satisfying customers, 92.3 percent of them do not have a written e-commerce strategy.
Source: AED
