The Death and Life of B2C

It’s become fashionable lately to deride business-to-consumer e commerce web ventures as victims of hype. The newfound caution about the growth of B2C is certainly warranted, given the near-term opportunities for business-to-business web commerce.

Although Gartner’s recent prediction of trillions of dollars in B2B within the next 2-3 years smacks of the same hype that previously afflicted B2C, the prognosis that B2B has greater near-term potential remains sound. Businesses already have the right bandwidth connections, with competitive pressures forcing more and more of them to at least dip their feet in real on-line transactions.

But don’t totally dismiss B2C. The issues are adjusting expectations—especially when it comes to creating new branding identities. Remember, the attraction of going on line is to add convenience and create value by allowing consumers to do more things with the business that they must transact. Although the emergence of new brands like Yahoo or Amazon make it tempting to predict that pure on-line plays will revolutionize consumer buying, recent history has shown that when familiar brands deliver real value and convenience, consumers will go back to the familiar every time. Remembering every new dot com in the long term will prove more effort than it’s worth.

Therefore, while new, on-line pure plays like the First Internet Bank or E*Trade may draw the attention of the downtown media, the Citibanks of the world have golden opportunities to enhance their brand identities by adding new capabilities that allow consumers to have more control and visibility into their bank or investment accounts. We recently had the chance to visit yodlee.com, part of a new generation of on-line service providers whose products—in this case, consolidation of consumer financial statements—could provide exactly the type of service that can help click and mortar brands, like Wells Fargo Bank, make their services even more compelling. It may not be as exciting as inventing the next Yahoo, but in the long run, the flowering of the B2C market development will more likely be driven by new under-the-hood technology that reinforces the names we already know.