Business-to-business E-commerce is forecasted to grow from $145 billion in 1999 to $7.29 trillion in
Is the growing trend of E-commerce in the security industry part of our collective E-magination? No. It’s really here, and judging from what dealers, associations, manufacturers, distributors and Web portal providers are saying, it’s here to stay for the long term. However, the consensus among the same group is that it still has a long way to go, especially before it becomes a primary means for residential end users to buy alarm systems.
Business-to-business E-commerce is forecasted to grow from $145 billion in 1999 to $7.29 trillion in 2004, when it is estimated to represent 7 percent of all global sales, according to the Gartner Group, based in San Jose, Calif.
By definition, E-commerce is the actual act of purchasing over the Web. It involves placing a credit card number into the system or accessing an established line of credit. It is a definite leap from merely browsing the Internet to conduct background research. Dealers, manufacturers and distributors all agree that E-commerce will never replace other methods for making transactions, it merely provides another option.
The main advantage of using E-commerce to purchase products and services is huge time savings—up to 70 percent, according to one dealer. Other advantages include improved product research and cut-sheet availability, ease of ordering and shipment tracking. Some disadvantages include lack of technical assistance and the reduced assurance that products will make it to the job site.
Distribution Delivery Is Changing Slowly
According to the 1999 Security Sales Dealer Survey, 27 percent of dealers report having used the Web site of a manufacturer or distributor to order products. Yet, the same survey reveals only about 1 percent of all product purchases are made online. ADI, which sells reportedly $1 billion annually in products, has set a goal to sell $100 million via E-commerce in 2000, according to Steve Roth, group executive of Pittway’s security group.
Human Contact Missed; Comfort Level Key
In addition to ADI and securitycameras.com, dealers highlighted Martco, Supplydog and TritEd as other good E-commerce sites. In terms of business-to-business marketplaces, in which multiple sellers are brought together online via an entity that does not stock inventory, dealers cite AlarmX.com and Securitysource.com as two Web portal sites with E-commerce functions.
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