The Business-to- Business Electronic Catalog Market Status and Directions EDI/Electronic Commerce ¥ Program ; December 1993 The Business-to-Business Electronic Catalog Market Status and Directions 1881LandingsDrive,MountainView,California,94043 41 THEELECTRONICCATALOGMARKET:STATUSANDDIRECTIONS INPUT Table ofContents LIntroduction A.Background B.Objectives C.Scope D.Methodology E.Definitions n.ExecutiveOverview in.CatalogMarketSizeandSegments A.MerchandiseSalesVolumesofPrintCatalogs B.Business-to-BusinessCatalogMarket 1.TotalBusiness-to-BusinessSalesVolume 2.TotalB-to-BCatalogSalesVolumeThroughTraditional Catalogs 3.MerchandiseSalesVolumesfromElectronicB-to-BCatalogs a.NumberofElectronicBusiness-to-BusinessCatalog Titles b.LeadingSegmentsofElectronicBusiness-to-Business Catalogs c.BulletinBoards rv.IssuesandDirectionsofElectronicCatalogs A.TheRationaleforElectronicCatalogs 1.CatalogFunction 2.BenefitstoBuyers 3.BenefitstoSellers B.TheElectronicCatalogwithintheMarketingandSalesFunction C.TheBusinessEnvironmentforElectronicCatalogs 1.Single-vs.Muki-VendorCatalogs YED TOC-1 THEELECTRONICCATALOGMARKET;STATUSANDDIRECTIONS INPUT 2.DistributionIndustries 3.InhibitorsofElectronicCatalogs 4.AcceleratorsofElectronicCatalogs 5.FinancingElectronicCatalogPublication D.ElectronicCatalogArchitectureandTechnology 1.Advantagesofonline 2.AdvantagesofCD-ROM/diskette 3.FutureDevelopments E.DevelopmentsRelatedtoCiticorp'sCreditServiceConcept V.CatalogIndustryParticipants A.IndustryOverview B.ManufacturersandDistributorsthatMarketthroughCatalogs 1.Overview 2.ProfilesofElectronicCatalogPurveyorsthatare ManufacturersandDistributors a.Wilco . .- b.BrodartCo. c.DigitalEquipmentCorporation d.Baker&TaylorBooks e.Airinc/AmericanAirTransportAssociation fAutolnfo C.TraditionalCatalogServiceProviders 1.CatalogPrinters 2.Publishers a.SweetsElectronicPublishing b.ThomasPublishingCompany,Inc. c.CahnersTechnicalInformationService 3.OtherServiceProviders a.CreditCardandInformationProcessmgService Bureaus b.ComputerServiceProviders c.CatalogSoftwareVendors d.ListBrokersandProviders e.Industr}'Watchers D.Non-TraditionalElectronicCatalogServiceProviders 1.InformationTechnologyVendors a.TriadSystemsCorporation b.INFOEnterprises c.GEInformationServices d QRSQuickResponseServices 2.Start-UpElectronicCatalogServiceEntrepreneurs a.AutomatedCatalogServices b.VerticalTechnologies TOC-2 YED THEELECTRONICCATALOGMARKET:STATUSANDDIRECTIONS INPUT 3.OtherVendors VI.ConclusionsandRecommendations AppendixA:UnstructuredInterviewTranscripts AppendixB:QuestionnaireforAssociationInterviews AppendixC:DatafromAssociationInterviews YED TOC-3 THEELECTRONICCATALOGMARKET:STATUSANDDIRECTIONS INPUT Introduction "A Background CiticorpServicesInc.isexploringmanynewavenuesforproviding banking/financerelatedservicesintheemergingelectroniccommerce environment.Oneareaithasidentifiedisintheareaofcommercialcredit. Intraditionaltransactionsbetweencorporations,thesellerpartytypically extendscredittothebuyer.Itallowsthebuyernottopayituntilthirtyor . mwhoerreedbauyysianfgteirsictohnadsucstheipdpoevdetrhenegtowoodrsk.sIannadnwehleecrterobnuiyceresnvbirroonwmseent, electroniccatalogs,extendingcredittobuyersisnotanautomaticgesture onthepartoftheseller.Theanonymousrelationshipbetweenthebuyer andsellerinanelectronicenvironmentprecludescredit.(Thisisassuming thatthebuyingcompanyisnotusingacreditcard,whichishappeningas well.).BusinessdevelopmentstrategistsatCiticorpServicesInc.are wonderingifthereisamarketopportunityinprovidingacredit-extension servicetoelectronicbuyersandsellers.Citicorpwantsanoverviewofthe providersofelectroniccatalogandrelatedbuyingservices.Ithasasked INPUTtoidentifyplayers,outlinethestructureofthecatalogindustry,and makesuggestionsastowhomightbeinterestedinsuchacreditextension service.Citicorpisalsointerestedinsurveyingsomeoftheleadingcatalog providersanddeterminingtheextentoftheirinterest,howtheyseethe marketforelectroniccatalogbuyingevolveoverthenextfiveyears,and otherissues.Citicorpisinterestedonlyincorporate-to-corporatebuying thatdoesnotusecreditcardsnorusesmainstreamEDI/EFTmechanisms tosettlepayments. YED »••'*5jSf- THEELECTRONICCATALOGMARKET:STATUSANDDIRECTIONS B ObjectivesofthisStudy Createatargetlistofcatalogpublishers/sourcesthatwillhavethepotential needforcommercialcreditservices. Assessandsizethetotalsumofcorporate-to-corporatebusinessbeing conductedviacatalogsales. Assessthetrends,issues,anddirectionsofelectroniccatalogpublishing. « C ScopeofthisStudy ThescopeofCiticorp'sinterestconsistsofthreecomponents; Findcatalogproviders.Theymayinclude:distributors,manufacturers, publishers,telephonecompanies,tradeassociations,service bureaus/providers,.... Sketchoutthestructureoftheelectroniccatalogmarketplace.Whoarethe players,whataretheverticalmarkets,whataretheissuesthatare impactingthisindustry(technology:howeasytousecatalogs,pictures, parameiricaaiainterfaces;andcompetitive:howwillthemdustry ultimatelybestructured,aservicebureau,alargemanufacturerasthekey supplierofcatalogs?) .• . Surveythecatalogproviders.Findoutwheretheythinkthemarketis going,wheretheindustryisevolvingto.Dotheyseecreditservicesasa viablevalueaddedservice?Areelectroniccatalogsawaytoreplace distributorsandawaytoexpandintonewmarketplaces?Howsoonwilla significantportionofbusinessbedoneoverelectroniccatalogs.Will catalogplatformprovidersbesimplyaclearinghousefordata,ordothey getapieceoftheactionofthetrade.Howmuchshouldcreditservicescost (3%likecreditcards).Howshouldcatalogservicesbepriced(whatshould thefinder'sfeebe?) Thesethreecomponentscanbedeliveredintwophasesofresearch: Phase1willincludenumbersoneandtwofromabove.Phase2willinclude numberthree. 1-2 YED THEELECTRONICCATALOGMARKET:STATUSANDDIRECTIONS INPUT P Methodology Phase1methodology: INPUTwillcompileadirectoryofapproximately100catalogpublishers whoarethemostlikelycandidatestoprovide(orarealreadyproviding)an electronicservice.Thisdirectorywillincludecontactnames,industry served.INPUTwillfindthisinformationbysurveyingtradeassociations, variousdistributorgroups,largecatalogpublishingcompaniesandother' sourcesdeemedappropriate. INPUTwillclassifythecatalogpublishersinrelationtotheoverall economy,indicatingtheindustrysectorsanddistributionchannelseach serveand,totheextentpossible,howmuchdollartradethecatalogsare responsiblefor.DataforthisportionofanalysiswillrelyonDepartmentof Commerceandothergovernmentsources. Inadditiontotheabove,INPUTwillidentifyandinterviewtwoorthree providersofelectroniccatalogs.Theseprovidersaretobegeographically locatedintheSanFranciscoBayarea.ACiticorprepresentativewill approvetheselectionofthecatalogproviders Phase1resultswillbepresentedinareport. E Definitions Thefollowingdefinitionsarekeytodiscussingthebusiness-to-business electroniccatalogindustry. Business-to-businessmerchandisecatalog: - Acatalogusedtomarketand/orsellthemerchandiseofabusiness (thesupplier)toanotherbusiness(thebuyer).Distinctfroma consumercatalog,whichsellsfromabusinesstoaconsumer. Spiegal,EddieBauer,L.L.Beanareexamplesofconsumer catalogs.Thisreportfocusesexclusivelyonbusiness-to-business catalogs. YED INPUT Busimss-to-businesselectroniccatalog: - Abusiness-to-businesscatalogthat,insteadofhavingtheformofa printedpaperbooklet,isplacedinelectronicform,typicallyviaan onlinedatabaseoraCD-ROM(compactdisc,read-onlymemory) diskette. Multi-vendorcatalog: - Acatalogthatliststheproductsofseveral(oftenthousandsof) vendors.Examplesofmulti-vendorcatalogsareMcGraw-Hill's Sweet'sCatalog(ofbuildingmaterials).Inabusiness-to-business scenario,itwillusuallybedistributorsthatwillprovidemulti- vendorcatalogs. Single-vendorcatalog: - Acatalogthatliststheproductsofonlyonevendor.Digital Equipment'sDECDirectisanexample.Thecataloglistsonly Digitalproducts.Inabusiness-to-businessscenario,itwillusually bemanufacturersthatwillprovidesingle-vendorcatalogs. 1-4 YED