Contribution from Horace Mitchell - MTA/ETD

The following attended and participated:

Michel Declunder, michel@declic.net, Kalimedia/Déclic
Michael O'Shea, edi@edi.wales.org, EDI and EC Centre, Welsh Development Agency
Karel Uyttendaele, karel.uyttendaele@fabrimetal.be, Fabit Information Technologies
Maaike Tromp, maaike.tromp@mediaplaza.nl, MediaPlaza
Sylvia Martinez Yenes, yene@hotmail.com
Hubert Mech, bik-gmbh@micronet.de, BIK Halle
Yves Bayart, ybayart@3suisses.fr, mediaphore (3 Suisses)
Horace Mitchell, horace_mitchell@compuserve.com, European Telework Online

The meeting was organised by Michel Declunder and hosted by Yves Bayart, Manager of Electronic Commerce, mediaphore/3 Suisses (see below)

There were three elements to the meeting:

1. A tour of the 3 Suisses "Cité Numerique" (Digital City) facility;
2. A discussion with Yves Bayart about the 3 Suisses approach to electronic commerce and issues identified by 3 Suisses;
3. A workshop focused on proposals for formalising the Network.

3 Suisses

20% of 3 Suisses sales are made by telematic media - traditionally telephone/Audiotex and Minitel. Parts of the catalogue have been on the world wide web since June 1995 (http://www.3suisses.com). Work is in progress to launch the entire catalogue online in October 1998. 3 Suisses is an integrated business with an in-house consumer finance facility and has developed specialised secure electronic payments facilities based on the USA GCTech Kleline technology. Specialist mail order and retailing aspects include micropayments and couponing capabilities.

An electronic catalogue is accessible via Multicable - the 2Mb network of Paris-based Lyonnaise-Communications. 3 Suisses is an active participant in an advanced trials project "Batru Highway", using ATM to deliver high performance interactive electronic retailing, including face to face live video between the customer and specialist sales and customer service staff. A strong focus of this project is to understand the behavioural aspects of the customer relationship in a high-performance ICT-rich environment.

Cité Numerique (Digital City)

From the photographic stage onwards the catalogue production process is entirely digital, with images, text and design moving through a series of studios towards complete artwork and photgravure ready for large scale printing. The final print and physical production of the paper catalogue is the only process that leaves Digital City, being done by contracted specialist printers.

Design and production of the online catalogue parallels the printed version but has it's own studio and clearly differentiated specialist skills, since the interaction between customers and the online catalogue differs considerably from that with the paper version.

Digital City comprises a small network of self-managing businesses that promote their services to outside clients as well as handling the 3 Suisses requirements. The businesses and studios are linked by a high performance network so that work products move between the businesses electronically. The site is an exceptional exemplar of the juxtaposition of old and new skills and technologies and demonstrates the continuing importance of traditional skills into the information age - artistic and design skills with wood, plaster, paints and other finishes, fabrics etc remain the foundation on which conventional skills in lighting and photography create the original images that are central to the end product, whether that be on paper or on screen.

The total headcount at Digital City is 150, increased from 100 a year ago. The building as well as what goes on there is "hi-tech" - the front reception and meeting areas externally resemble the prow of a ship or the nose and wings of a seaplane; the centre comprises air conditioned open plan areas in which the various digital aspects of the work are done; the rear includes hangar-type studios for physical sets, together with a large central open space or "street", compete with bar and restaurant. The environment is relaxed, but busy and highly creative.

Issues in electronic retailing

1. The practical changes in processes and therefore in skill requirements, timescales and the nature of customer interactions;

2. Changes to the underlying business model as customers switch from interacting with a static intermediary (the fixed paper catalogue) to interacting (as the customer sees it) directly with the company itself as represented by the @live@ website;

3. Issues confronting retailers in Europe as electronic media and single market policies start to bridge the conventional boundaries of national retail markets and there differentiated cultural and regulatory environments;

4. Issues for Europe as a trading and economic entity arising from the USA's clear lead in online methods, the large homogeneous home market available to US-based retailers, and the general tendency for USA to provide a more liberal environment for market innovation while European enterprises operate in markets that are more prone to protective or defensive regulation.

Yves Bayart has written articles on the particular issues and it is inappropriate to try to reproduce here the details and nuances. However some important messages emerge of relevance to the direct of the Network:

1. All those present found face to face discussion with a senior manager from a "serious player" in electronic commerce of immense value - the issues emerge in a much more direct and real way than they do from discussion among experts or messages from speakers on conference platforms;

2. Cultural and regulatory differences between countries in Europe persist even in the context of harmonised regulations;

3. These differences can be as important in electronic as in conventional commerce, especially in retailing and other consumer trading;

4. The ability of Europe-based enterprises to compete in local as well as in global markets is significantly affected by local cultural and regulatory practice, including nationally differentiated as well as European harmonized ones;

5. If Europe or it's member states adopt more protective or defensive regulatory stances while others (notably the USA) pursue more progressive or liberal approaches, Europe-based enterprises will be more vulnerable to global competition.

6. For existing enterprises the introduction of electronic commerce involves new skills and understanding and substantial changes in customer and market relationships, not simply the migration of existing methods onto an electronic base;

7. Old methods and electronic methods will persist side by side for a long time, therefore a thorough and strategic introduction of electronic methods entails significant additional costs and needs to be undertaken as a strategic investment rather than as a marginal "test-the-water" activity;

8. The new electronic methods need the attention of experienced and capable people who fully understand the company, it's markets, customers and practices, as well as innovators with new skills and fresh thinking;

9. Successful entry to electronic methods entails consequences in other aspects of the business, especially in terms of accelerating the business cycle and, in many cases, the introduction of 24 hour 7 day activities in back office and logistics as well as front office functions.

I hope I have captured the essence and flavour of our very useful discussion with Yves Bayart, but I invite him and other attendees to please add their comments, propose corrections and (particularly) to highlight any messages I may have missed.

Horace Mitchell
European Telework Online
Newbury, 15 September 1998