"We felt emboldened to move more quickly, to accelerate our plan for an Internet presence," says Perry Reynolds, director of marketing and trade development for National Housewares Manufacturers Association in Chicago.
NHMA produces the wildly successful International Housewares Show, which draws some 1,600 exhibitors and 60,000 attendees to Chicago every year and is the major revenue producer for the association. But just as more and more businesses are discovering that it's not enough to have a "bricks and mortar" presence without an equally sophisticated online one, so are associations. And NHMA is one of a handful jumping head-first and fast into building highly profitable virtual marketplace communities.
The group will launch a revamped Web site this March, one that positions the association as the Internet portal for its segment of the manufacturing industry.
But what exactly is a portal?
The Three C's "Portal" is a loosely used term, but essentially it is a Web site that offers a broad array of resources and services for members, such as e-mail, forums, search engines, chat groups, and online shopping malls. The first generation of Web portals were consumer-oriented ones that are now household names: Amazon.com, eBay, AOL, and Yahoo! These sites are constantly adding reasons for consumers to visit and to buy products and services.
But it is the business-to-business portals, rather than the consumer-oriented ones, that analysts say are going to really hit the jackpot: According to Fortune magazine, more than 90 percent of the predicted $1.4 trillion in Internet commerce will be conducted between businesses. The Gartner Group, a technology consultancy, predicts the 2,500 Web portals of 1999 will balloon to 25,000 in 2001.
Leading the pack is Horsham, Pa.based VerticalNet (www.verticalnet.com), which pioneered online portals for specific (i.e., "vertical") market segments four years ago with the creation of commercial hubs such as WaterOnline.com and Nurses.com. Now worth well over $2 billion, VerticalNet has quickly evolved into a cybermediary syndicate with 55 business-to-business portal sites.
Each VerticalNet site focuses on providing the three C's: community, content (information), and commerce opportunities for a specific industry or profession--which sounds an awful lot like the purpose and function of many associations.
This new kind of for-profit competition suddenly has a lot of associations revisiting their Web sites and asking: How can we use the Internet better to capitalize our knowledge base and our position in the marketplace?
In the Fast Lane In many ways, NHMA was already ahead of the game. The group's nearly three-year-old Web site (www.housewares.org) was, from the start, viewed as an alternative distribution channel for members' goods, Reynolds says. Of NHMA's 2,000 members, 70 percent are small companies with sales under $20 million, and the NHMA Web site became an integral sales channel for them. NHMA also had a robust virtual component on its Web site. But the changing landscape has pushed NHMA to reach for the next rung: to become the Web community its members will always consult first.
"We had decided our association's Web site is a marketing opportunity," Reynolds says, "and from our members we get to the community concept. The NHMA found itself in a position last spring to be more of a trusted third-party presence on the Web for the housewares industry rather than just a distribution channel for members, Reynolds explains, and in his mind, the concept of community inevitably became interchangeable with the concept of portal." It all led the housewares association to hire eSociety.com, Bellevue, Wash., an Internet portal builder that targets associations. (See sidebar, page 38.)
Reynolds says he expects NHMA's Web traffic to rocket in the spring after the new site launches on March 8. The latest features are classic community-builders and a good example of the "Three C's" at work. The site will
* have a "Newsstand" where members and anyone else will access up-to-date industry news,
* rev up the capabilities of a housewares industry job bank,
* add a fully portable manufacturer rep directory,
* add a supply price quotation through an online RFP service, and direct commerce tools for buying and selling on the site, and
* host both a new products showcase as well as a "Hot Products" showcase, as defined by NHMA members.
Anne Gordon, eSociety.com president and CEO, adds some general tips for forward-thinking associations when designing a Web portal site for their group:
* Exploit the Web's potential for networking.
* Seize the potential for online commerce for members by offering transaction models that not only match sellers with buyers, but facilitate the exchange with auctions, catalogues, and marketplaces.
* Use the Web for lobbying. For example, with an active online community, getting the word out on legal and regulatory issues can be done in minutes with a rapid-response electronic campaign.
* Deliver education and professional development via a Web site that can save members time and money.
Revenue Op? Regarding revenue for the association from these Web site activities, Reynolds says that NHMA looked at the community concept "altruistically at the outset, with the association's new Web portal having only a tangential bearing on nondues revenue."
Reynolds declines to talk about specific figures, but there are revenue-generating mechanisms built into eSociety.com's Web model for its clients. A fee is built into each transaction made on the site, which is split 50-50 between eSociety.com and NHMA. Transactions include any subscription-based services offered on the Web site, such as advertising and sponsorships. The sale of goods and services on the site also carry a small fee, again split 50-50 between eSociety.com and clients.
NMHA is strong and successful, so why the portal push?
"We have looked at the rationale of other associations as they move on to the Internet, and we see our venture on the Internet as an added value," Reynolds says. "We are an authority on the [housewares] business, and we already create in real time mutual self-help groups and peer group interaction.
"We simply see the Internet as another meeting," he says.