Thursday, June 24, 2010
Teaching e-commerce by shopping only online
BRUCE D. WEINBERG has set foot in a store only once in the past six
months, but his shopping diary is required reading for his M.B.A.
students at Boston University.
Mr. Weinberg, an assistant professor of marketing who has vowed to
shop only over the Internet, is apologetic about his slip-up. It
happened in late September, when one of his bike tires blew out and
there was no computer in sight.
Other than that, he's kept a strict vow of cyber-purity since
September, shopping over the Internet for everything from a $5 bottle
of Mylanta stomach medicine to a vintage Rolls-Royce.
His goal? To give his electronic-commerce students an inside glimpse
at what works, and what bombs, when selling in cyberspace.
Mr. Weinberg keeps a detailed diary of his shopping experiences on a
World Wide Web site that awards "Brucies" to companies that go out of
their way to please him and "Noosies" to those that tick him off
(http://people.bu.edu/celtics). Mr. Weinberg has also created a second
Web site that seeks to educate consumers and businesses about
He originally planned to end his e-commerce experiment January 1, but
now that he's on a roll, he thinks he can hold out until September,
one full year after he started.
EARRINGS, TIRES, AND HOT SAUCE
The diary is filled with chatty, often hilarious accounts of his
purchases, which include dress shoes, ruby earrings for his wife,
Batman action figures and memorabilia, tires for his car, Cajun hot
sauce, and a water heater.
"Hurricane Floyd is not going to interrupt this e-shopper," he wrote
on September 16. "As long as electricity is humming through the veins
of my PC, I can burn up the digital aisles of the world. I need to get
a battery for my watch.... Tomorrow, I think I'll order some groceries
as I am getting hungry, and then, after that, maybe I'll buy some
retirement real estate."
Mr. Weinberg hopes his experiences will make better Internet shoppers
and consultants out of his students, many of whom will be helping
companies plan Web sites after they graduate. They're tapping into an
area with a staggering potential for growth, but a sobering number of
failures. Businesses sold some $177-billion in goods and services to
other businesses over the Internet last year--an amount that is
expected to jump to $2.7-trillion by 2004, according to Forrester
Research Inc., which analyzes the impact of changing technology on
business. Meanwhile, businesses sold $20-billion in goods to consumers
Despite the boom in online sales, many companies are struggling to
make a profit, and even those that succeed in attracting first-time
buyers have trouble retaining them, Mr. Weinberg says.
He hopes to help his students, and the business community, determine
why so many e-commerce efforts falter.
"I figured, companies aren't making enough money, and customers aren't
happy," he says. "Why can't I dive in there and analyze why that is
and pass it on to practitioners?"
Students enrolled in his electronic-commerce course must complete a
series of exercises that require them to become both buyers and
Working in teams of two, the students create their own Web sites,
which may make money but don't have to. For instance, one student
created a Web site with everything a consumer might need to know about
buying watches, while another set up an online travel agency.
Students must buy something online and interact with a company's
customer-service representatives. They must also return an item and
buy and sell something in an online auction. For each exercise, they
write a short paper on their experiences.
A second-year M.B.A. student, Greg Crescenzi. says becoming a
more-savvy online customer will help him next year, when he begins
work at a consulting company in Cambridge, Mass., that handles
business-to-business electronic commerce.
"I'm finding that I take a much more critical look at Web sites," says
Mr. Crescenzi. For instance, while renting a car for a vacation, he
swore off one site that required him to go through many cumbersome
steps before it gave him the information he needed.
Customers who buy online are generally better informed and have more
clout, Mr. Weinberg says.
"You can reach C.E.O.'s. If you send them an e-mail, they'll often
respond. Granted, I'm a professor and the company might have more
reason to respond to me, but I still think it speaks to the impact
consumers can have in this industry. They're definitely empowered," he
"Seven years ago, when you bought a car, the dealer held all the
cards. If he knocked $1,000 off the price, you thought you got a good
deal. Now, as a customer, you know what he's paying and what is a fair
price. The information is all out there in the open."
"SO DARN MUCH FUN'
Wading through all of that information isn't everyone's idea of a good
time. But for Mr. Weinberg, a computer-science major turned e-commerce
guru, online shopping is addictive.
"What I think is so incredible is that it's so darn much fun," he
exclaims in typical exuberance. His diary entries reflect his
"Big Big Big Brucie to OutPost.com and a Big Big Brucie to Kozmo.com,"
he wrote on December 16. "The Palm V [an electronic organizer] that I
ordered from OutPost.com at 10:54 pm last evening, arrived today at
11:30 am. Wow, I was blown away."
But treat him wrong, and this Internet shopper tears into a rant.
In his January 22 diary entry, he shared the e-mail he had sent to
DrugEmporium.com. "Congratulations, you have earned a NOOSIE for poor
service on shipping this order. I placed the order on January 19 with
NEXT DAY delivery requested. You managed to take a couple of days to
get the order out, and then managed to send it with GROUND service.
Not the way to treat a customer, and particularly no way to treat a
customer who earlier in the week gave you a Brucie."
A customer-service representative responded 10 days later with an
apology and a coupon for $10 off of future orders. Mr. Weinberg says
he'll place another order, but if the service is poor, he'll award the
company "a lifetime Noosie."
SHIPPING A ROLLS
The most expensive item he shopped for was a 1958 Rolls-Royce Silver
Cloud. After months of searching the Internet and bidding on a few
cars, he ended up inheriting a Rolls that had been in his family.
Still, he did use an online transportation company to deliver the car
In his November 5 entry, he casually mentioned that his new car had
arrived, but reserved most of his enthusiasm for an impulse buy he had
made the same day on the eBay auction site: the Batman's Villain
Gallery and action figures.
Mani Rafii, a second-year M.B.A. student, says Mr. Weinberg's passion
for Internet buying makes for some entertaining classes.
"He's like a small kid who's jumping around when he's gotten a big
gift. He's especially excited if he's gotten something for free," says
Mr. Rafii, who has accepted a job with a consulting firm in Boston
that advises German companies that are selling online.
"This is helping us understand both sides of the industry--what the
consumer wants, like fast delivery and no minimum orders, and what
problems businesses are likely to run into."
M&M DELIVERY TEAM
Mr. Rafii conducted his own experiment during a recent class. The
general manager of one of Mr. Weinberg's favorite Internet sites,
Kozmo.com, was visiting the class that day to talk about his service,
which promises to deliver items like videos, CD's, and food within an
hour in designated cities, for no delivery fee. Mr. Rafii decided to
put the company to the test. He typed his order into his laptop
computer at 6:05 p.m., just as the class was beginning. At 6:40, two
delivery men knocked on the door and asked for Mr. Rafii. They handed
him a box containing one bag of M&M candies, along with a bill for
"Everyone was shocked. It was really quite funny," he recalls. His
stunt turned into a lesson on marketing strategies.
"I asked him how they can stay in business if people order M&M's
10 times a day. He told me their model is trying to please a customer
as fast as possible, and relying on word of mouth to get new
business," Mr. Rafii says. Even if someone takes advantage of the
system, most customers will be impressed with the prompt service, and
will spread the word, he explains.
Kozmo.com officials would not release information about the company's
financial performance, but Mr. Weinberg says it is not making a
profit. "I have no doubt it's going to become a big-time player, and
eventually be profitable," he adds.
Even before the World Wide Web was invented, Mr. Weinberg was
experimenting with a precursor of the electronic marketplace.
While pursuing a Ph.D. in management at the Massachusetts Institute of
Technology in the late 1980's, he developed a computer-based,
multimedia shopping system for automobiles. "You could get inside the
car and talk to the salesperson--it was very realistic," he says.
NO NOSTALGIA FOR "REAL' STORES
Mr. Weinberg has focused recently on how cars are bought and sold over
the Internet. His interest was piqued by a Web site, CarsDirect.com,
that allows customers to buy cars online and have them delivered to
their door. "Initially, I thought that this concept was crazy, because
it excludes visiting a dealer for the time-honored traditions of
tire-kicking and test-driving," he says. "Later, I realized that
tire-kicking in this day and age is absurd; and a five-minute spin on
a smooth-surfaced highway doesn't provide much value."
That got him thinking about whether customers could buy just about
anything over the Internet. Mr. Weinberg says he's in no hurry to go
back into a "real" store, but might be forced to this summer.
"Our third child is due in June, so it might get tricky," he says.
When the diapers have run out, even a one-hour wait can seem like an