You know, the challenge for many, particularly direct brands I think that one of the major
trends we see right now in the Web commerce area is that a lot of the direct brands are now
aggressively embracing doing direct to consumer business themselves via their Web sites.
And five years ago there was quite a hesitation in that and it was primarily predicated around the
concerns of channel conflict and competing with their customers and other large channels, competing
with my distributor, competing with a major retailer. I think that time has calmed a lot of those
fears. I think that, you know, many of the channels have shown that
allegiance to a brand only to a
certain point, i.e. the best price. And as a result I think many of the major manufacturers and
brand companies have learned that they simply have to be able to provide a direct channel in order
to be clear that theyre getting their message to consumers in terms of the extension of their
brand and that it isnt changed or watered down by other channel members. And also for, you know,
vivid announcement of new products and new areas that are there.
So as a result, you know, the areas that we were focused with is in these is in a lot of these
brands where we see that their commerce sites either are not conducting commerce at all right now
or from that data that we collect we find that their percentage of revenue is below their peers.
And we will market those companies to show them how we can not only get them there quickly but we
can provide them with, you know, world-class capability that their customers will, you know, find
to be an extension of their brand from there. So its real important for us we use the slogan
the brand behind the brand. We have to enhance the brand value of that. So I think those are
kind of macro trends that are driving that market area out there.
And I completely agree with your comment that were kind of at the elbow of this thing. I mean,
PFS was a pioneer in the Web commerce area. You know, back in the mid 90s we were some of the
really early to providing PC-based ordering tools and the first on the Internet or one of the first
companies on the net in terms of providing commerce sites. You know, this business really exploded
and grew out of the dot-com area earlier. During the retrenchment period in the early 2000s
timeframe, early part of this decade, you know, we had to take and step back and focus on some
additional channels as that activity slowed down. But I agree with your comment. Were at the
elbow and there is there is really good potential for us in a market that is growing nicely.
LANG GERHARD: But who are you who do you compete with when youre, you know, approaching a
customer or potential customer along those lines? Who are they shopping other than you?
MARK LAYTON: Well, it depends on the geographic area. You know, in Canada its different, in
Europe its different. But lets talk about the U.S. where the majority of our business is at. In
a Web in Web commerce deals we would compete with companies
like GSI Commerce, Innotrac (ph).
Theres a private company called New Roads (ph). You know, these are companies that have a little
bit different niches of where theyre at. GSI (ph), for example. With sporting goods and
apparel retailers we see a lot more than we would with technology, for example. And in the
technology area we see UPS supply chains division a fair bit. And there are other smaller
boutique and local fulfillment houses out there that we compete against. But those names I just
described in the Web commerce area are the primary ones we compete in.