Is this a confusing year or what? Amazon.com teams up with its arch-rival Borders Books. Online grocery delivery company WebVan crashes, and K-Mart, the mega discount store, jumpstarts Bluelight.com for those online bargain hunters. E-commerce sanity or a speedy return to the customer experience?

In the last six months, as 'pure-play' companies (meaning those e-commerce operators with no real-world experience) began to crash and burn, others hastily downplayed the .com part of the name. They didn’t want investors to think their business models were only tied to e-commerce. Companies with lofty business plans and no profits gave the ‘e-tailing’ a bad name. It was America’s foot-and-mouth disease. And just like the funeral pyres of livestock in the British countryside, eager TV reporters zoomed in on dot-come crash. The blue chips provide ample footage. Motorola and Dell slash its staff by the thousands. Intel, HP, and Cisco declare losses. Reporters with pallid faces, stand in front of empty parking lots, playing with the "R" word no one wants to hear. "Are we in a recession?" they ask, rhetorically? The worry lines on Federal Reserve chairman Alan Greenspan’s forehead say enough.

Blinkers Off
But if you tune out the TV reports, and don't monitor the NASDAQ, there are clues as to a different breed of business taking shape. It’s hard work, but then cyberspace was not supposed to be an automatic path to profits. As Lynn Upshaw and Bob Liljenwall, warned in their "ebrand newsletter" last year, "online is a channel for retailers, not a reason-for-being." Simple as this observation is, it helps put things in perspective. The Internet was that set of blinkers that people rushed out and put on, expecting a radical shift. Futurologists were suggesting that the networked economy would mean the end of business (and the death of brands). Corporations, office space, sales people and even products would become obsolete. Hard goods, basically composed of atoms, could all be digitized in some form or another, so why bother to manufacture it, store it in warehouses, or display it in showrooms? Like music which represents the bits-to-bytes theory (from CD’s to P3 files), all products could be 'servicized' (yech! don’t you hate that word?) and downloaded. This drove fear and foreboding for many old-economy retailers who had huge investments in inventory, people and operations. Toys R’ Us, for instance, was threatened by start-up eToys a few years back.

So, it was probably about time that this naiive vision came to a screeching halt. Notable failures were companies like Pets.com and WebVan which demonstrated that to survive, you do need to have (or work with) 'bricks' even if you are all 'clicks'.

Puppy dogs and Diapers (which, still can’t be downloaded) aren’t all that exciting in a virtual window. You do need real people for customers to talk to, and you often need that seemingly passe` interface, we call 'showrooms'. Customers were not willing to give up the experience factor, and today eToys is in the scrap heap of dot-com history. Apple iMacs on the other hand have people ogling them in showrooms as if they were girls in swimsuits. Until artificial intelligence replaces our humanity, the experience matters. Reeboks need to touched, Levi’s need to be fitted on, for goodness sake.

Peace, Love and Big Trouble
Despite what you may read or hear, people aren’t anxious to radically alter their lifestyles. They pick products because they offer solutions, not because they look cool. Often the ‘cool factor’ complicates life. If it doesn’t involve plug-and-play, foggedaboutit! The old economy is far from dead. Old-line manufacturers and service providers have leveraged their distribution channels, struck new alliances and given new life to their brand experience.

Take that seriously offline company, Maytag, manufacturer of washing machines and clothes dryers. (Not easy to convert these to bytes!). As late as in the year 2000, it had no e-commerce strategy. Was it brand dead? The company recently launched an online site that enables shopping with a twist. A customer who plunks a washing machine into a virtual shopping cart has to complete the transaction through a retail partner like Sears, depending on where she lives. This does not alienate the ‘channel’, and moreover allows the customer experience to be further nurtured. Someday when the customer wants a part replaced, she has a ‘bricks’ entity to turn to. Clicks are great, but they do not address the emotional side of branding. The E in E-commerce stands for Experience!  Maytag calls this the B2C2B model. Its washing machines are still made up of atoms. You may pay for one in cyberspace, but you’ll still want to bang the steel drum with your fist before you pull out that wallet. So don’t be in a hurry to replace that sales guy with a pull-down menu. Entice your customer with a Web site, but don’t deny her the experience.

Amazon.com is one of the few online brands that understands this. Amazon is to e-Commerce what Sears was to a shopping mall. It was a brand experience. Its value was not the absence of a store-front, but it’s operation. It learned how to connect with its customers. It uses collaborative filtering to recommend books to readers based on their interest, publishes ‘purchasing circles’ that lets you know what people in other industries or companies are reading etc. Recently Toys R’ Us realized that it could benefit from Amazon’s approach to customer experience. The two met and got married. You missed that story? Of course, the media didn’t turn up at the reception. They were busy covering the dot-com funeral.