What is 'crossing the chasm' exactly?
It's a term coined by Geoffrey Moore in his book of the same name on high-tech marketing, a core read for MBA students. Moore draws on the technology adoption bell curve, which shows markets evolving through take-up by innovators, early adopters, the early majority and the late majority.
Innovators are 1% to 2% of the potential market, and early adopters 15%; a mass market is reached when a product is adopted by the early and then late majority, which each account for 33% of market potential.
Moore argues that there is a key breakpoint, or potential 'chasm', between the early adopters and the early majority. Early adopters will take risks on new technologies, while the early majority are more risk-averse, look for incremental rather than revolutionary benefits, and are sceptical of fanatical endorsement from early adopters. Failing to make the leap across this chasm is the downfall of many promising new products and businesses.
How would you apply this framework to the internet and e-commerce in 2000?
Basic internet access has clearly crossed the chasm. 'At home' household access in the US is now approaching 30%. The UK is maybe a third lower, but catching up fast.
So far the key driver of access penetration has been the internet's killer consumer app: e-mail. Even 80-year-old grannies are signing up in droves to e-mail their far-flung offspring. Over 70% of consumers say e-mail is the primary reason they use the net (way ahead of, say, using search engines or portals).
E-commerce is a different story: in general, it still has to cross the chasm. E-tailing in the US this Christmas was running at less than 1% of total retail spend. Even if you look at only those consumers with net access at home, they are doing less than 2% of their spending on the net.
Haven't some categories already made the leap?
Some categories are much more advanced than others. Books, CDs, videos, travel, software and stock trading are highly branded (so consumers know exactly what they're getting), and easy to deliver physically (or don't need delivery at all).
But even these categories are mostly still in the 'early adopter' stage (with the exception in the US of software and stock trading). Other major retail categories, such as grocery, clothing, cars, durables and most financial services, haven't yet got past the 'innovator' stage.
E-commerce evangelists, extrapolating current growth trends, believe the transition to an 'early majority' mass market will be smooth and rapid.
Moore would say this is too optimistic - there's a real risk of businesses or whole categories falling into the chasm, at least for several years, as happened with mobile phones and cable TV in the late '80s/early '90s.
How can the chasm be avoided?
Moore proposes focusing on one key customer segment as the bridgehead into the mass market - say, selling Macs into corporate graphics departments. This idea works in the e-commerce B2C world - but the key segmentation is by purchase occasion. I buy the same white work shirts twice a year, in batches of five or 10, with no browsing; but I buy casual jackets on impulse and I like to browse. M&S should grab me online for the former, and maybe boo.com for the latter (if boo will ever download in under a year), with very different propositions.
I make my skiing travel arrangements several months ahead, but I buy weekend city breaks at short notice and on impulse. These are two very different segments and business models (for Iglu.com and lastminute.com). Targeting me as an overall consumer will be too broad and won't satisfy me on any front.
Moore also proposes focusing on the 'whole product' rather than just a core technical functionality because, unlike early adopters, the early majority want easy, comprehensive solutions.
For dot.coms, that means a much greater focus on the overall customer experience and interaction, rather than web-site content and transaction.
Grocery customers need to have the e-commerce 'last mile' solved - or while they save 30 minutes on checkout, they end up losing four hours waiting in for the delivery van. Christmas shoppers need to return and exchange gifts as easily as they can at Bloomingdales. I need to be able to check or change my Expedia-purchased air ticket on the phone if I can't log on while I'm driving to the airport.
These ideas could help dot.coms build their rope bridges over the chasm