When hype surrounds a new technology, skepticism often follows. And the non-stop buzz of E-commerce, indeed, has drawn its skeptics. But it has lured its avid proponents as well, who have entered—and become successful—in the world of E-commerce.
In the avionics industry, the reaction to E-commerce appears mixed. Some in the industry are challenged to uncover Web-based marketing’s hidden benefits, and thus, initial acceptance to E-commerce perhaps can best be described as lackluster.
What follows are some reasons for the avionics industry’s reluctance to enter E-commerce, along with tips for establishing a Web marketing program and several success stories in this new endeavor.
What Is It?
Resistance, in part, comes from a misunderstanding of what E-commerce is—and isn’t. Other causes are lack of funding, a wait-and-see mentality, and a basic inability to identify processes that the Web can better handle.
In truth, no singular, simple definition of E-commerce exists. Being a rapidly evolving technology, many industry experts continue to speculate on what it might represent to business-to-business (b-to-b) markets.
Many consumer markets presently enjoy the benefits of E-commerce (amazon.com being a prime example). However, in the avionics industry, the paradigm is not easily grasped; the products are expensive, the applications more complex and the technology highly specialized.
"Even though many companies now have Web pages, that doesn’t mean they’re anywhere close to E-commerce," states Steve Moen, vice president of Chicago-based Aspen Consulting, an IBM Premier Business Partner (www.asp.com). "We look at the aviation supply chain as largely behind other consumer industries...In general, people are still looking for more standardization."
Still, the avionics industry’s extensive use of E-commerce is only a matter of time. According to Forrester Research Inc. (www.forrester.com), b-to-b sales will grow to more than $1.3 trillion by 2003 and make up almost 90% of all online sales.
The largest category in b-to-b E-commerce will be electronics, according to Forrester Research. And estimates indicate that aerospace will grow to become one of the larger b-to-b online sectors. The promises of radical change are daunting.
Starting with E-Business
"The basic misconception is that E-commerce is selling a product on the Internet, and that is only part of the story," states Moen. "We need to look at the entire business process, from start to finish, to see where it can make an impact."
A difference, therefore, exists between conducting business on the Web and E-commerce. E-business includes all aspects of business, not just selling. Some companies may find that the quest to automate the business process through the Internet may lead to online selling—but it may not.
What prevents many firms from enjoying the promises of E-commerce is the intimidating task of implementing on-line sales. Over the years, companies have refined the quite comforting process of printing catalogs, faxing orders, sending e-mail correspondence and distributing data to customers and suppliers.
"Companies fear throwing money at the Internet because they don’t know what the return on their investment will be," says Moen. "So most start out cautiously by getting a dot-com domain name and then get stopped. They really should look at their marketing plan and tackle something they can afford, to see if it works."
The one-piece-at-a-time approach commonly begins with product photographs that are scanned or taken electronically and posted to a Website. This, at least, gives visitors a quick visual of a company’s products; accompanying text and captions can offer more information.
"What typically follows is a sense of complacency," comments Matt Dula, a former aviation executive, now a convert to E-commerce marketing. "They tell their friends and clients that they’re online and think that they’re covered—and they’re not at all."
"For many companies, a Website is like an electronic brochure, or a digital business card," adds Noel Suarez, a freelance Webmaster. "Unfortunately, the Web is moving much faster than that, and surfers that are looking for an ‘info-meal’ and only see a few scanned pictures are going to go away hungry and probably angry."
Some companies "think people are just browsing or window shopping," Suarez adds. "And the reality is that they’re hunting for information and have no time to be teased with pretty pictures and some cheap animation floating around the screen."
Experts agree that a Website should be much more than a cheap way to create a brochure. Market leaders in E-commerce have invested heavily into Websites that give visitors exactly what they are looking for and subsequently have transformed the expectations of the Web-wielding audience.
Consider Churchill Corp. (www.atrbox.com), a manufacturer of "black box" avionics enclosures, located in suburban Boston, Mass. What initially stood in its way was converting the old, printed product catalogs into a user-friendly digital format.
"Our first step was to create an area on our Website that would allow engineers to access real-time product specification sheets of our line of ARINC enclosures, and the Internet gave us that tool," says Marshall Schermerhorn, Churchill’s general manager.
However, communicating specs represents just one means of developing customer loyalty, lower costs and higher profits. Some companies achieve customer satisfaction by automating repetitive, time-consuming activities such as catalog requests, pricing inquiries and customer feedback. Others, which receive telephone calls and faxes from many time zones, use the Web to tackle in real-time the lengthy process of routing calls, processing requests and mailing documents.
The affordable format of choice to present information online has been the Adobe portable document format (PDF). This format can display information originating from countless data sources in a standard, semi-frozen, low-file-size "screen shot" on the Internet. Converting documents to PDF’s (such as maintenance manuals, brochures or product specifications) is fairly easy and typically requires either scanning or "distilling" a document.
"This is a real win-win for everyone," states Schermerhorn of the PDF format. "As a small supplier, we now have a global reach and provide our online data catalog to customers 24 hours a day, at no real additional cost to our operation. Automated feedback to the Website has been very strong because people get what they want right away."
A Rush to Dominance
Currently, E-commerce in the aviation industry largely has been developmental, with no one company dominating this new marketing tool. However, one company is racing to assume the leadership role, with a shotgun approach to E-commerce in aviation.
"We’ve been the middleman, now we’re going to become the market," boasts Mark Eglington, vice president, business development, of Florida-based PartsBase.com (www.partsbase.com). "We’re a hub, not a spoke, so we don’t pose a threat to anyone’s business. We’re an interface, giving companies immediate global access to the parts they’re looking for."
What PartsBase.com has created online is both impressive and ambitious. Its strategy has been to drive the entire aviation industry toward a portal system, through which buyers find sellers online-at their Website. And it’s all based on facilitating the meeting.
An annual fee of more than $1,000, allows subscribers to search the PartsBase.com database, a vast array of more than 37 million line item part numbers. Once a subscriber finds an item, PartsBase.com generates a list of potential suppliers. From there, the subscriber requests pricing by clicking on those suppliers that have inventory, inserting a required quantity and submitting a request for quotation (RFQ). The system immediately broadcasts an RFQ, and the subscriber gets a quotation directly from the suppliers that want to quote the items.
"We have more than 13,000 subscribers, and we’re adding more than 300 every week," Eglington reports. "We don’t know when we’ll hit critical mass, but our goal is to be number one."
PartsBase.com’s service is not limitless, however. The service finds parts at competitive prices, but does not provide technical information on items. As an information broker, they can only refer the subscriber directly to the supplier for additional data.
Many times, finding a part is the sole goal. But companies often also seek solutions to customized, aircraft specific applications, so obtaining technical data can be critical. Not surprisingly, the major manufacturers like Honeywell and Rockwell Collins are continually developing new ways to provide comprehensive customer support.
When Ed Alft, a senior avionics engineer with Midwest Express Airlines in Milwaukee, Wisc., used to research a Honeywell Service Bulletin, the process required talking to a company representative and could take hours or even days to complete. Now, by using Honeywell’s Website (www.cas.honeywell.com), he can complete those same tasks in 10 to 15 minutes, with a clear, accurate printout of the specific document he has requested.
"It’s been very helpful in getting answers when we need them," Alft says. In fact, Honeywell has spent the last four years expanding access to their technical publications—specifically service bulletins—to now include more than 1 million downloadable PDF pages. The Phoenix, Ariz.-based firm has archived data as far back as the early 1960s. Honeywell’s Publications section—only one facet of its Website—offers on-demand, secured access to technical newsletters, service bulletins and component maintenance manuals.
Kevin Brennan, Honeywell’s E-commerce IT (information technology) lead, says his company’s goal is to expand the Website’s reach into all aspects of customer support, including accessing comprehensive directories that list current revisions of publications in real-time. Even if Honeywell customers don’t have the secured-access rights to download the material, they still can access the current revision level by downloading a publication index online.
Collins on the Web
Rockwell Collins (www.collins.rockwell.com) plans to unveil in April a total online E-commerce Website, where more than 300,000 catalog items will be available for sale. "Our vision is to extend our enterprise system upstream and downstream, to suppliers and customers," states Harry Gregory, Rockwell Collins’ vice president and general manager.
Gregory claims his company’s future is tied directly to its Web strategy. He says it will bring together suppliers and customers into an integrated system that operates real-time. Rockwell Collins’ expectations are to dramatically increase customer value, while driving sales and lowering administrative costs.
"This is not about ‘vaporware’ parts," he adds, "but about utilizing the Web to accomplish lofty goals like Web-based RFQ’s, online ordering, placing repair orders, Web training, conducting technical data queries, and much more."
E-commerce has been proven to benefit both customers and suppliers/manufacturers. "Internet sites can be tied into real-time inventories," says Matt Dula, "We clearly can translate that into a huge benefit for someone on the flight line.
"Imagine someone who is looking for a spare part at 2 a.m. for an aircraft that is down," Dula adds. "He can access a Website where not only he finds the part he needs, but he also can confirm availability, order it immediately, and track the shipment."
For the supplier, providing such a service requires few, if any, additional personnel. The investments are made up front, and the paybacks come through automated customer support without unnecessary human intervention.
Skeptics may claim that this dehumanizes customer support, but this can be compensated by the consistent fulfillment of an organization’s expectations. In fact, with E-commerce, companies are bringing people closer together and making their market smaller and more intimate. The supply chain consequently becomes more seamless as the industry strives toward standardized interfaces, bringing down the barriers to doing business globally.
Joseph P. McCormack is a freelance marketing consultant based in suburban Chicago, Ill.
Reaching Bizjet Heights
When many people ponder purchasing online, they think of books or CDs from, say, amazon.com or cdnow.com. Imagine, however, booting up your PC to order a $40-million jet aircraft.
Don’t laugh. It’s been done.
Gulfstream Aerospace recently reported the sale over the Internet of its intercontinental flying G-V to, who else, a dot-com company. The customer, Mark Cuban, founder of broadcast.com (recently acquired by search-engine company Yahoo), says Gulfstream’s Website afforded him "the opportunity to gather in-depth information and do research during non-working hours."
Best news for Gulfstream is that the broadcast.com G-V deal was not its first sale over the Internet. At the last National Business Aircraft Association (NBAA) show, the bizjet manufacturer announced it had sold a $22.9-million pre-owned G-IV to Elite Aviation Inc. of Van Nuys, Calif.
With both broadcast.com and Elite, time was a critical factor for using the net. "Previewing pre-owned aircraft is a time-consuming and expensive proposition," says Elite’s president, Richard Hodkinson. Gulfstream’s Website "greatly simplified the purchase process."
In case you wish to purchase your own G-IV or G-V, the Website to go to is www.gulfstream.com .