The Second Coolest Thing Online
By John Avignone
DECEMBER 7, 1998: Just a few years ago, the coolest thing you could do on the Web was look at live pictures of someone's fish. The simple novelty of graphics-based Web pages was enough to send nerds into paroxysms of rapture. Few people were worried about useful application of the new technology. It was a world awash in thousands of "Hi, I'm Joe Blow and this is my life" Web pages.
Nobody has an accurate count, but there are now more than 100 million Web sites out there and most of them don't include pictures of the family dog. Now the coolest thing you can do on the Web is make money. But the reality is almost no one is making money.
The second coolest thing you can do online is spend money. And millions of people are doing just that. The rush for those bucks means a bonanza for savvy shoppers. It can also mean a maze of confusion, especially since this Christmas season is expected to be the first real test of online shopping .
Most manufacturers and retailers have evolved from using Web pages as online brochures -- if they had a Web page at all -- to setting up stores and even malls in cyberspace where you can buy almost anything with the click of a mouse. And like malls in the real world, location is everything.
Early adapters -- people with cell phones, notebook computers and fax machines in their GPS-equipped SUVs -- have already embraced Web commerce. Millions of purchases are made online every day. You can find anything from airline tickets to Zebra mussel jewelry.
With all of the choices out there, Web shopping should be a breeze. So why is it more 80% of people with Internet access have never bought anything online? And why do many not even consider online purchasing? What's holding back the rotary dial crowd besides technophobia?
The number one reason given in surveys on the subject is security. People are afraid to send their credit card information over the Net. They are worried that some evil hacker will intercept their card information and use it to buy a small third world country. The funny thing is these same people have no problem at all handing that card to a minimum wage-earning clerk they don't know from Adam and allowing them to make a copy. Store employees are one of the major sources of credit card theft. During the holidays, when many employees are seasonal hires, the problem intensifies. There are security issues with using a credit card no matter where or how you use it. But in the face of risk and uncertainty, most people will stick with the old and familiar, even if it's actually more dangerous.
In today's marketplace it is almost certainly safer to buy online than by phone or even in person. The latest generation of Web browsers -- like Netscape's Communicator 4.5 -- allow very strong encryption of sensitive information. This means your credit card information is encrypted before it ever leaves your computer using a code only the authorized recipient can read. In the unlikely event of someone somehow intercepting your order, all they would see is a bunch of meaningless random characters. While it may be possible for someone to break the code, it would most likely take thousands of computers or a couple of supercomputers years to crack a single message.
So how do you make sure you have 128-bit encryption? Download the latest version of your favorite browser and choose the strong encryption option. You will have to fill out a form stating that you are a citizen of the U.S. or Canada or a legal resident alien as it is currently illegal to export this level of encryption technology.
This encryption scare tactic is a ridiculous example of a clueless bureaucracy trying desperately to catch up with technologies they understand no better than a dog understands Shakespeare -- dogs know someone is talking, they just can't understand what is being said. But that's another story.
If you are using a browser with 128-bit encryption and ordering through a secure site, it is virtually impossible for anyone to compromise your personal information. Even using weaker encryption, online shopping is very safe. It's just not cost-effective for anyone to try to steal your information. Does that mean all Net commerce is safe? No. Scams abound on the Net. Anyone with $100 and a little know-how can put up a Web site. There are unscrupulous operators out there. The best way to protect yourself is to know whom you are doing business with. You wouldn't buy a new car from some guy on the corner. Why chance a major purchase from an unknown source online?
The easiest way to enter the world of Net commerce safely is through a Web portal, the malls of the online world. Retailers pay big bucks for space on the major portals like Netscape, AOL, Microsoft, and others. No fly-by-night shady operator can afford this cost of doing business. The problem with portals is that, just like malls, they limit your selection to the portal's partners. Netscape will only send you to Netscape partners, Microsoft to Microsoft partners and so on. This can make comparison shopping online more difficult.
The other problem with portals is that most of the prime online real estate is taken. This makes it difficult for many retailers to be noticed. The big boys in online retailing, like Amazon.com, spend massive chunks of money on name recognition on the theory that he who markets first and most wins. As a result, retailers wanting to make a splash in online commerce have to be willing to spend millions of dollars knowing they will not see profits until sometime down the road.
Most Web retailers, like Amazon, have yet to turn a dime of actual profit. This has not stopped Wall Street from making them high-tech darlings with stock values approaching GM levels. The exceptions are more innovative retailers like Dell. Even without a portal of their own -- they are currently developing their own online service and do advertise on major portals -- Dell does huge business online with impressive profit margins. At last count, Dell was doing more than $10 million per day in sales through their Web site.
Portals are a great way to shop on the Web, but how do you find the majority of retailers that don't have portal space? In addition to popular search engines such as Yahoo and HotBot (which tend to point you to their partners), there are a number of good price comparison search engines out there that will help you find the best deal on popular products (see sidebar).
A general search on a product or manufacturer name can turn up all sorts of information, from product reviews and technical specs to price comparisons and lists of dealers. You may have to wade through a number of hits before finding what you're looking for, but it can be worth it, especially for large purchases where shipping charges can be much less than local sales tax.
Are there great deals online? Absolutely -- better deals than you can find from local retailers. Maybe. Make sure you take into account shipping and handling charges. Should you be worried about using a credit card online? No, but you should be careful, just as when you use it anywhere.
For your first online shopping experience, start small. Buy a book, or even order a pizza. You'll be much more comfortable with the idea of online shopping after going through the process a few times. Soon you may be using the mouse instead of looking for a parking place.
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