It is a fairly long trail of family history that leads to the small Novawind office building on Tel-Aviv’s Rothschild boulevard.
Company general manager is Gilli Cegla, whose grandfather established, in 1946, a business for the import of cereal grains to what was then known as Palestine. He transported his merchandise by camel from the Tel-Aviv port to the storage areas behind the building. It is from that same building that the grandson now runs a company specialising in global marketing by Internet, and offering on-line strategic and marketing services.
For the succeeding generations of marketers, it’s no great difference to see the camels replaced by network servers. The main improvement is that consumers can use various network tools for the rapid scanning of numerous businesses, and find the one best suited to them, all without leaving their homes. This new concept holds out all sorts of possibilities for Internet marketing companies like Cegla’s: instead of marketing merchandise to the customer, why not market customers to merchants?
"We intend to create an on-line shopping revolution", Cegla says. "Our thinking proceeds from the consumer outwards". By this he means that network consumers can assemble in a single site, and let the stores reach them, instead of their running around the various stores. "The object of the revolution", he continues, "is to reverse the whole direction of trade".
What Cegla has in mind is actually the construction of on-line consumer communities, sub-divided into countries of residence. Suppliers wishing to sell to members of these communities must reach the customer directly, instead of attracting him or her to their premises. Cegla, in fact, envisions C2B* traffic replacing B2C** (*customer-to-business, **business-to-customer), with the consumer himself becoming the business centre.
The proposed arena for Cegla’s revolution will be the Vshop consumer site set up by Netmark, a subsidiary of Novawind. The object of the site is to accustom consumers to smarter network consumerism, while at the same time accustoming traders to the network’s new game rules, enabling consumers to make rapid comparisons between numerous businesses, with favourable or adverse information on the commerce site being rapidly disseminated among customers.
In order to achieve these aims, the site is divided into three parts: an information department, stores, and comparison shopping:
The information department is designed to supply new network consumers with information and to cope with presently existing fears and lack of information regarding network shopping. This department maintains a large data base on a wide variety of topics relating to one-line shopping, and a consumers forum. In addition, there is also a question-and-answer mechanism, assisted by various experts, and a system for filing complaints against network businesses. The complaints are examined by the site system before being published for all site visitors to see.
The second part, the stores guide, provides an extensive index on commercial sites in all parts of the world, sub-divided by categories. As distinct from other indices, the virtual stores entering this database are thoroughly examined before being admitted into the system. A business seeking admission must provide full business details, including the owner’s name and the businesses providing backing, and this information is checked out by Vshop’s investigators.
The company’s investigators also rate the stores, which are put into the database together with details of the business and a 1-5 grade. This grade, incidentally, may change in accordance with routine customer rating.
But the truly innovative part of the site is its comparison shopping. This actually consists of a search engine, which scans numerous commercial sites on the consumer’s behalf, and presents him with a round-up of products in line with his definition.
"Most comparison engines existing today focus on price", Cegla explains, "whereas the technology we use is able to find a product meeting various definitions. Using our site, the consumer can tell the system: ‘find me a refrigerator with these exact measurements’, depending on the space he has between the wall and the kitchen work surface, and the system will locate a product meeting those exact requirements".
The customer is presented with potential purchases in rising order of price. This is where the ‘reversed trading direction’ comes into play. It is possible, for example, that in future, consumer requirements can be grouped under different headings, thus confronting traders with a large group of customers all demanding a particular product, and thereby achieving the best prices.
Cegla believes, in any event, that in face of the current flood of Internet information, in which a direct comparison can be drawn between merchants, e-commerce sites will have no choice but to join data-bases such as his, and adapt their supply of products, prices and service level to customer requirements.
Both in the comparison-making department and in the stores index, a click on the name of a product or a store will lead the customer directly to the trading site. Cegla’s philosophy, assigning the customer the central role, leaves trading to the traders and sales transactions will not be concluded under the Vshop site. "We do not handle sales", Cegla says, "but only shopping".
For the moment, the site is exclusively Hebrew speaking, and makes sure to list only businesses that deliver in Israel. As comparative shopping gets underway, other Vshop sites will be introduced, intended for various European countries, and will require shipping capability to a specific country. These sites will address English, French, German, Italian and Spanish speakers, depending on the target country.
No payment will be collected from the customers joining the consumer communities, or from the businesses appearing in the site. Cegla proposes to find his money in other profit centres: firstly, revenues from site advertising and the publication of commercial pages, emphasising that the pages were purchased by commercial firms.
In general, Cegla is persuaded that the success of the operation depends on its supplying reliable and unbiased information. "The systems exist separately", he emphasises, "there is a technical support system, there is a content system headed by the site editor and there is a commercial-marketing system, which is completely separate from the program system".
Another important profit centre is the payment collected from the commercial sites for each customer referred to them through the comparative shopping system, regardless of whether or not a purchase was made. This, Cegla says, is already a problem of the traders themselves. In addition, the site can develop to various directions and new profit sources, but Cegla claims that these things will develop from the ground up, in accordance with customers’ requirements.
Cegla, who is currently recruiting investors in Israel and Europe, is betting that investors will concur with his view that the future lies not in commercial sites, but in consumer sites.
Published by Israel's Business Arena September 1, 1999