• The Impact of the Internet on the active sports market
• Internet - What are the driving forces?
• The growth levels
• The war for the consumers' attention
• The printed word -the most successful product sold on the Internet

• About other commercial and successful ventures on the net
• Specialised sporting events on the net
• CDs, electronic book or interlinking media?
• Why I go on-line to read the newspaper
• Exhibitions - the exciting role to be played by the Internet

My personal introduction to what is now called e-commerce was at a seminar held by the CBI in April 95,where I was able to mix with several of the leading UK retailers and advertising agencies. Amongst the presentations was one by Microsoft of a pre-release version of their on-line merchant programme which had been customised for K-MART USA. The CBI members present, who had been working as a specialist focus group concerned with on-line sales and multimedia marketing for 12 long years were of the opinion that "we have lift-off"

I could perceive that there were interesting opportunities which I could not at that time pursue. My next opportunity occurred in June 1997 when I got myself on-line to the Internet .

The following articles represent my personal grasp of the subject which eventually lead into a new start-up operation MMSL, with a strong Internet focus .

Article written July 1998 for World Sports Active and about to be updated before publication .

"The Impact of the Internet on the active sports market"

It is remarkable to think that we could be using the word "impact" about something which didn't exist prior to 1992. This was the year when Tim Berners- Lee put his amazing trio of programmes onto the Internet. This trio of programmes, (http:// which enables computers to look up Web sites which have a domain (URL) address, and of course the HTML language which enables us to not only connect text but voice and pictures as well by clicking on the hypertext) is what essentially fired up the World Wide Web on the Internet.

This article sets out to examine the impact and opportunities opening up in the active sports textile market, through the rapid expansion and increasing sophistication of the Internet. The impact of the Internet lies not only in business to business and business to consumer operations, but also in the

COMPANY ORGANISATION

These three programs have now pervaded PC computer software with positive and potentially cost saving effects. You will be able to follow your own personal line of investigation by clicking on any of the hypertext links. Confidential intranets enable company staff to hyperlink quickly from one document to the next, those people seeking and extracting information belonging to everyone else within the organisation, can do so on a much easier and more rapid basis than hitherto.

Communication costs are being steadily and significantly reduced, the death of the long distance call is on the horizon. There is even a possibility that computing costs themselves will fall when making a new installation, because the option is now becoming available to install a net computer system (or thin client server system as they now more usually known).

There is no reason to believe that the textile industry is not using the many cost-saving benefits, which use of the Internet can bring, any more or any less than

other industries.

BUSINESS TO BUSINESS

The Internet is becoming a vital research tool. New services are springing up, e.g. GTN (global textile network), whose mission is: "to bring together buyers, sellers and traders in textiles, live, on the Internet." On this site

Textile sales people can now help the buyer in assimilating information about the suitcase full of samples brought with him by cross-referencing his company’s Web site. Additionally the perennial problem of textile (piece goods) is being solved, close-outs are being bought and sold, by a bidding process, on the Internet.

If you're looking for Asian suppliers of textiles, you will find that an excellent job has been done by a Hong Kong company to get 36,000 manufacturers plus 41,000 products on-line, and their information all into one site:-

Quick response now becomes within reach for the smaller manufacturer and retailer, because of standardisation and the rapidly decreasing costs of servers. Additionally, most of the CAD/CAM packages which are available, now have Internet linkages. Full suites of product design and manufacturing information can be transmitted down the Internet to a remote factory either in your country or another continent, and certainly into Asia. Here the CAD/CAM suppliers are very well established and can help you connect even if your supplier doesn't have these same programmes himself!

BUSINESS TO CONSUMER

The national sporting goods association (N. S. G. A), an organisation for Americans sporting good retailers, has issued a leaflet giving guidelines with a 15 point plan as to how to use the Internet. John Small of 33 North Inc. interactive marketing, which does all the work for the Sports Super site and all the individual work to support NSGA members, speaks from extensive experience and is at the focal point of the sporting goods world on-line. In the leaflet to NSGA members, he said: "Today the Internet is an outstanding one-to-one marketing communications system. Tomorrow your electronic storefront may be contributing as much profit as your bricks and mortar location." Here are a number of examples:

Hi-Tec, the sportswear brand, report a 10 percent increase in sales into store in South Africa by quoting retailers names on their Web site. Saucony sport shoes USA are now tracking shipments to retailers by SKUs and can tell what was shipped to an individual retailer in the last 30 days. This information is then relayed back to their Web site.

The Sports and Leisure Yellow Pages lists 4,000 stores by 28 categories. The on-line consumer can put in their address and they'll be shown their nearest store. As a particular example of effectiveness of this, Mel Cottons, a store established 50 years ago in San Jose, is averaging 75 new consumers per month into their stores through the Yellow Pages.

The next step in Internet technology will follow in the next few months. This is to enable Sports Yellow Pages to bring up, automatically, a banner advert for a store in the same town as the consumer who is logging in.

The examples above quite clearly prove John Small's view that the Internet is an outstanding one-to-one marketing communications system.

The profit potential of Internet stores is normally quite high because the operating costs are often around 1/4 of those for a physical store.

The reasons for this (other than a lack of bricks and mortar) are: a) that inventory costs are very low (there being almost no stock), and b) that fulfillment companies are being used to ship the products. Additionally, incremental growth can be achieved without any real cost increases. However, prices are often lower and it’s also a good place for a retailer to sell his end-of-season close-outs.

What sells on a Web site? Typically, hardware products, which are bought on reputation/specification. Golf hardware is probably the sporting product most impacted upon so far. Sales of outdoor garments are among the most successful of all garment categories because sizing is not so critical. Fashion is less successful so far because of fit being critical and touch and handle are vital purchasing characteristics.

The view in Antarctica is even better when I take my goggles off !

In a recent ( 2^nd quarter 1998)Internet report by accountants/consultancy company Ernst and Young, the findings were that the consumer percentage of on-line purchases was still, as yet, small. However the Internet was an important shopping venue for comparisons, and for finding a nearby retail store which could provide your needs. As such, the conclusion was that the Internet definitely had impact.

THE SPORT ITSELF

THE FUTURE

One of the exciting happenings over the next year will be the arrival of digital television in several different countries. This will give the possibility for viewers to click on a quoted Web site on the TV screen and be connected directly through to the Web site. The first trials had the Brand advertisers watering at the mouth. This indeed could be the turbo charger for the new form of electronic Internet commerce which we can clearly see emerging.

Mike Parsons, formerly chairman of Karrimor International Ltd., is now running Mountain Marathon Sales Ltd and Outdoor biz Consult

visiting Professor at HUBS (Huddersfield University Business School)

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THE INTERNET AND INTERLINKING MEDIA

A report on the status of electronic commerce and the opportunities open to companies in publishing. Dec 1997 with November 1998 updates Mike Parsons

"The web it is like NATO, everyone sort of realises its important but doesn't know why!"

Evan I. Schwartz in his book ‘WEBONOMICS’

1.1. COMPETITIVE ADVANTAGE The recognition by established business that there is a new era of electronic commerce emerging and that some experience should be gained. The objective being to gain advantage or to avoid being disadvantaged.

1.2 SMALL COMPANY OPPORTUNITY The recognition by entrepreneurs that the Internet and the World Wide Web represent a huge opportunity for small start-up operations, because, on the net at least, they can be the same size as a multinational corporation.

3. THE ADVENT OF DIGITAL TELEVISION. Coming soon to most countries

is digital broadcasting (arrived autumn 1998 in and in UK). There is a whole new industry behind the scenes preparing for interactive TV and those who have seen trials of interactive advertisements are spellbound. (See my later comments about the battle of the boxes).

1.4. RESEARCH. The Clinton administration in USA has pledged $ 100 million to support the activities of 50 universities researching the next generation of the Internet which will be 1000 times faster than today.

1.5. BANKING: despite all the computerisation over many years by the banking networks, transactions are still extremely high cost and there are huge opportunities for those banks who exploit the Internet and secure transaction systems. Transaction costs for a bank are typically £10 each but only 50 p when done over the Internet.

1.6. COMPUTER SOFTWARE: the direction of most future programme writing will be that software is relating very strongly to networks, eg. Microsoft WINDOWS 98 is written in a format similar to the way a browser works and the actual Web browser itself will be even more integrated (and we have all been able to read the full reports on Microsoft versus the federal and state anti-trust organisations of the USA

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The Internet is the fastest-growing service ever. It has been estimated that Internet connections have grown as fast in 10 years as the telephone did in 50 years. At the beginning of 1996 there were almost 10 million PCs connected to the net. By the end of 1998 there will be approaching 40 million There are approximately 100,000 new sites appearing monthly on the World Wide Web.

Is all this growth in the USA? Certainly the largest proportion has until recently been in the USA, however Asia - even China - has taken very strongly to the Internet. South America has also had particularly strong growth. There is an element in this growth of the wish to obtain freedom of access to worldwide news, particularly in countries where there are political constraints. (The Tiananmen Square news got out by the Internet.) The amount of commercial transactions being made over the Internet is small as yet, however the extrapolations for future business are huge.

Forrester said it expects consumers to turn to the Web in record numbers to fulfill their holiday gift-giving needs. A significant number of consumers are expected to make their first on-line purchases this holiday season, making 1998 "a pivotal year in the evolution of e-commerce."

Maria LaTour Kadison, senior analyst in Forrester's On-line Retail Strategies service, said that tough competition among retailers combined with aggressive advertising in traditional media by e-retailers will attract consumers looking for prices, products and convenience.

"Holiday shoppers traditionally face long lines, crowded aisles, absent or unhelpful sales clerks, and uncertain availability," said Kadison. "The Web offers the ability to find the best prices and multiple delivery options without the hassle of shopping in malls and stores. In a way, the Web restores some of the holiday gift-buying experience."

Three trends will emerge from the 1998 holiday buying season, Forrester said:

Converted holiday shoppers will continue buying on-line in 1999, as e-retailers look for new ways to capture consumers and spread sales throughout the year. Forrester said it expects increased use of e-mail reminders and gift-of-the- month services to lure consumers back to the Web for post-holiday purchases. Meanwhile, portals will focus on improving their retail services, offering one-cart shopping that enables consumers to use one cart and make one payment while shopping at multiple affiliated retailers.

"Last year, on-line retailers did not experience the traditional post-holiday drop-off in sales," Kadison added. "Forrester expects to see a similar ratchet effect again this year as consumers keep coming back to the Web for more and more purchases in 1999."

Forrester's report inflates the $2.3 billion holiday sales prediction made by Jupiter Communications. Both firms predict a huge growth from last year's sales of $1.1 billion. "

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This war consists of a number of separate battles, focused around the small screen.

3.1. INTERNET SERVICE PROVIDER BATTLES.

In the UK there are somewhere between 100 and 200 Internet service providers. The big three are CompuServe, AOL, and MSN. These companies prefer to see themselves as on-line media companies. The battle is to succeed in having their icon built permanently into the screen either by the PC builder or bundled into the software (this is the case with Microsoft who bundled MSN -- it can't be removed from your screen!).

3.2. THE BROWSER BATTLE

The inventor of the hypertext system, Tim Berners Lee, left open a key business opportunity for the world (that people logging onto the Internet had the option of which browser to use), believing people would want a device of their own choosing. The first browser was called "mosaic" followed by Netscape, who not long after went public in the summer of 95. The stock soon reached $ 4 billion on the assumption that what Netscape had was a similar monopoly system to that which Microsoft created with MS-DOS. This however was not the case. If you have bought Microsoft software recently, Internet Explorer is automatically bundled. Coming from nowhere Microsoft is now approaching 50 percent market share and new release of Internet Explorer 4 will probably take it beyond this level by a large amount. Why ? Because this allows corporations to control centrally what office PC users view.

3.3 THE BATTLE OF THE BOXES

last July after seeing the Tour de France on channel 4 I was able to switch off and connect into the Internet to find out exactly what had happened to my favourite riders who had not been reviewed by the journalist on the programme. I look forward to mid 1998 when digital TV is available. From then instead of having to go into the next room to turn on my PC, I will be able to log onto the Internet directly from my TV set. In anticipation of this Microsoft bought a small company nine months ago called Web TV. Effectively the computer industry wishes to make TV and PC inclusive, but the media industry wishes to make it exclusive, for reasons which might be obvious, but read on. When TV companies conducted the research on advertising with a linked website the results were absolutely dazzling. This is probably not only because one doesn't have to go into the next room and log on in the site name but also because the PC user is alert and receptive to new information, whereas the TV viewer is relaxed and inattentive

 

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4. THE PRINTED WORD - THE MOST SUCCESSFUL PRODUCT SOLD ON THE INTERNET.

There are many many examples of products being sold successfully on the Internet including, CDs, groceries, computer software, gifts, flowers, but the most successful of all is books. Below is a short account to of the runaway success of books on the Internet .

This enabled the company to stock on their premises only a very small proportion (about 400 titles) out off the 2.8 million titles which they list on the database. The company went public on the stock exchange a few months ago and used to the money partly to buy exclusivity as the only bookstore on AOL. This is the Internet equivalent of buying a retail store on the corner of the two most popular streets in say Paris London or New York.

There is a replica of Amazon.com based in the UK called Internet book shop. This company of course started later, is much smaller but is also successful, and floated on the AIM in London in Spring of 1997.( eventually bought by WHSmith in spring 1998 for 5x sales revenue of £2m!)

There's always a way - Patagonia

Again the company only stocks a very small proportion of everything sold but in this case is not located close to suppliers, and so has persuaded suppliers to mail the books direct to the consumer. The success of Internet book shop was based on sales to English-speaking business and medical staff located both in UK and, particularly, outside the UK.

Waterstones -- this company is still owned by the British news agent W.H.Smith but will be split out in the next few months. Waterstones are exploiting significantly the demand for English language books in overseas countries. They have book shops in Paris and Brussels, and have recently opened in Barcelona. They also have an extensive Internet book site.

Bertelsman the worlds leading English language publishing house, German owned, was beginning to experience ‘Tur scluss panik’ and paid 200 million dollars for a 50% share in Barnes and Noble a USA book retailer with an Internet presence

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6. Specialised sporting events on the net.

Mountaineering expeditions and the Internet.

Yachting -- the Whitbread Round-The-World Yacht Race results could be accessed on a 24-hour basis by anyone logging in to the sponsors site. In the next event the site sponsors have created interest of a significantly higher level. Consumers are able to nominate themselves together as a team,(but each locate anywhere in the world) select a boat, and then entering the site on a basis of several times per day, are invited to make navigational choices based upon the same weather forecasts which the actual competitors are receiving.

The owner of Quokka in a recent on-line interview stated that it was their belief that something new was happening to create this amount of traffic. The public generally was becoming very tired of the too generalist , ‘plastic presenter ‘on broadcast networks and on this web site participants

can not only converse directly with the competitors but even compete in a virtual race with the worlds best .

Food for thought indeed!

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THE WORLD OF INTERLOCKING MEDIA

At the 1997 Frankfurt book show, there was a steady confidence in the book areas of the exhibition, with an overall worldwide growth of 3-4%; however, in the halls exhibiting CDs there was a certain anti-climax, and there were fewer exhibitors than in previous years. My guess as to why this happened is because of certain spectacular successes which the imitators did not properly understand. The success stories here are quite stunning , and this led to a rush. The largest and most successful encyclopaedia in the English-speaking world has been for 100 years ENCYCLOPAEDIA BRITTANICA.

I do personally believe that CDs are particularly exciting only when they are linked to the Internet. Let me give you an example of the use of the Microsoft world atlas.

Rotate the Globe until you select France, on the left you will find Internet links, click, and you go from the map of France to a selection of sites which are about France in total ,geography ,economics etc.

In the office talking to my computer Dragon - "Naturally Speaking"

Next, zoom in on Paris and click-on the Internet links and you will find a new collection focused of course on Paris, so you can find for example a guide to the Louvre , a five-day weather forecast for Paris, or a guide to the Metro.

My next example is a CD by a children's book publisher called Dorling Kindersley. This CD is entitled, "A Chronicle of the 20^th Century"; effectively it is a new format history and the viewer can select either dates or biographies, or subjects eg war. This CD also has an Internet link. Instead of the link being to whatever sites externally are suitable, Dorling Kindersley have set up their own specifics site which can only be accessed by use of this CD. This site provides full and continuous daily update so the Chronicle of the 20th-century is always up to date. For example, I entered the Internet from the CD on November 1st and the headline story from the previous day (October 31^st) was the same story as in the newspapers. "Louise Woodward found guilty".

Looking at these two CDs in particular I can understand why they sold particularly well. What I find particularly exciting is the thought of products in the area of my personal interest - mountaineering and outdoors. Can you imagine what this would do for guide books?

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The regional press of the USA is not only where the real innovation is happening, but also where they are succeeding in persuading viewers to subscribe. This is because the viewer is able to customise and personalise both for the type of information and the layout of it to himself.

Where best to get news of the Internet and e commerce and computing than the Internet itself?

The following are all excellent but some easier to subscribe to than others

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The innovations by Outdoor magazine for their exhibition in Salt Lake City UT are very interesting. Trade visitors, i.e. buyers, can pre-register for the show and receive the following information and service. They are able to see a list of exhibitors, a floor plan, a list of interesting new products by exhibitor and by category, ask for further information by linking into the exhibitors website, and make an on-line appointment with those exhibitors who are important and interesting. The cost for buyers to pre-register is "normal", whereas for those people who are neither legitimate buyers nor exhibitors, there is an expensive fee - $180, unless of course you are a bona fide journalist!

Because I was aware of this new on-line service by Outdoor magazine, the CD which I brought home from Friedrichshaven was a great disappointment. It contained only details of how to get to Friedrichshaven by air, train, or road. There were no details whatsoever of the outdoor show, and I wasted much time trying to find it on the disk!