Weekly Web Watch - Old-fashioned bank Natwest is on e-commerce cutting edge

What’s a poor bank to do when the Internet is teaching its customers new tricks - and not just its personal banking customers but also its merchant customers?

What’s a poor bank to do when the Internet is teaching its customers new tricks - and not just its personal banking customers but also its merchant customers?

What’s a poor bank to do when the Internet is teaching its

customers new tricks - and not just its personal banking customers but

also its merchant customers?



In the physical world, banks are central to the settling of most

transactions that don’t involve cash. If you’re a retailer, you need

your bank to take the checks and credit card payments that your

customers present to you, and go and get the money for you. Online,

however, the job could be done just as easily by an IBM, a KPMG or even

Microsoft. Banks are being forced to think of ways not only to retain

their retail customers but also to position themselves at the center of

the online economy.



Some banks have chosen to run online shopping malls, with varying

degrees of success. The British bank Natwest, however, has opted to

launch a service called Cybuy (www.cybuy.com). Cybuy enables web

shoppers to buy things by going through a series of windows that pop up

when they click on a banner ad or link on a web site. At no point is the

purchaser taken away from the original web site. Typically, a Cybuy

banner ad will offer a certain product at a particular price - say

’Mulan, DVD/VHS, dollars 19.98’ - with an invitation to the web user to

’Cybuy it now.’ Subsequent screens enable the shopper to refine their

choice, for instance by choosing the size and color of a garment, or to

specify a particular shipping option, before confirming the purchase.

Cybuy is particularly suited to impulse sales - promotions, gifts,

flowers, hot sellers and so on - and it is not particularly good for

comparison shopping or considered purchases.



It works just as well in contextual links on sites as in banners.



What it also means is that the company doing the selling doesn’t even

need to have a web site. Unlike other ’buy-in-the-banner’ systems, Cybuy

doesn’t require the retailer to have any online transaction handling

capability of its own. Cybuy generates the order from the consumer,

sends the details to the shipping company, even if that is not the

retailer itself, handles the dialogue with the credit card or other

payment company and settles the payment across the supply chain. It also

operates a call center for any shoppers who might have queries or

problems about their Cybuy purchases, and will respond to inquiries by

phone or e-mail.



Although Natwest is a British bank, it has chosen to launch the Cybuy

service in the US, which has the most developed e-commerce market.

Natwest believes Cybuy will be able to generate online sales far more

cost-efficiently than retailers could manage on their own. One reason is

that by signing up many retailers, it will be able to buy online media

space very cost-effectively. The other reason is that Cybuy is using

Engage (www.engage.com), a global database of web users’ interests,

profiles and behavior, to target each offer at the people most likely to

respond to them. This is no different from the goal of most advertising,

although Engage is a very Internet-particular way of achieving it. The

theory, although it has yet to be proven, is that this will dramatically

push up the response rate to banners, and therefore the retailer’s

return on their investment.



Cybuy is a perfect use of the Internet. It exploits the unique

capabilities of the medium far more fully than sticking to the

’old-world’ metaphor of the shopping mall. But the really interesting

thing about Cybuy is that it was not done by an IBM or a Microsoft, but

by one of those ’old’ banks that are supposed to be on their way out.

Maybe there’s life in them yet.



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