‘The Information Highway allows companies to transform the way they do business, creating and accessing new markets and changing the way they relate to their customers, suppliers and competitors. Customers can tap into a whole new range of information about products and alternative suppliers. Businesses can gain access to large amounts of commercial and technical information from around the world. The access to codified knowledge facilitates the spread of best practice and new ideas and increases the speed of innovation. All these developments increase the intensity of competition, call into question traditional sources of competitive advantage and carry implications for firm organisation.’
Our Competitive Future: Building the Knowledge-Driven Economy, DTI, 1998

E-commerce is only one ingredient in a mix of social, demographic and economic forces reshaping the high street. Although it may be perceived as being responsible for current trends impacting on the high street, it is not necessarily a simple substitute for existing retail: e-commerce can be complementary involving novel transactions and services.

These advantages can be tabulated as follows:

‘The art of estimating how many are online throughout the world is an inexact one at best. Surveys abound, using all sorts of measurement parameters. However, from observing many of the published surveys over the last two years, here is an ‘educated guess’ as to how many are online worldwide as of June 1999.’

Research undertaken by NOP Research Group indicates that the number of people online in the UK (having used the Internet at least once) rose from 2% (960,000) of the population to 18% (10.6m) in the eighteen months to December 1998.

It should not be assumed that because an individual is online he or she automatically uses it for online shopping. Research into PC-based e-commerce suggests that 12-30% do so. Other findings put the figure higher (58%) amongst people who have been online for at least two years.

Factors affecting the take-up of e-commerce and associated technologies
A 1998 MORI survey of non-Internet users for ‘Which? Online’ found that only 30% of the population intended to go online with 19% declaring that this would not be for at least a year.

The 1999 survey found that 20 million people intended never to go online. This reluctance increases with age with up to 85% of people aged 55 and over never expecting to go online.

This reluctance could be due to perceptions rather than real disadvantages. The following text presents some current observations empirically contradicting common myths that surround e-commerce on the Internet:

An attitudinal study by BMRB attempts to provide a segmentation analysis of e-consumers by categories, resulting in the following profiles:

Realistic enthusiasts: 15%
Enthusiastic about e-commerce, and will use the Internet for purchases over £500. They will buy goods and services from unknown companies, judging the convenience of shopping over the Internet more important than price. However, they are realistic and want to ‘see before buying’ – usually in real life. Even they admit that finding the goods or services to buy online is difficult.

Confident brand shoppers: 16%
They are confident about using the Internet for e-commerce. They are willing to use the Internet for goods and services over £500 and advocate that one can always find a better price over the Internet than offered in the high street. They have a tendency to buy well-known brands and are motivated to ‘shop around’. Over a six month period in 1999, this group spent on average £275, some 20% more than the typical Internet shopper.

Carefree spenders: 15%
With a carefree approach to shopping online, this group represents 15% of the market. Carefree spenders buy from unknown companies and do not restrict themselves to well-known brands. They don’t feel they need to ‘see before buying’ and were responsible for almost one third of online purchasing in a six month period in 1999, spending 55% more than the average.

Cautious shoppers: 21%
These shoppers will not buy goods through online auctions, are concerned over the quality of products and need to ‘see before buying’. With a very cautious approach to e-commerce, just over one in five users fall into this category.

Bargain hunters: 16%
This group will not spend more than £50 over the Internet but will buy from unknown companies and indeed any Website as long as it is the least expensive. They are driven by price, not convenience.

Unfulfilled: 17%
17% of users find the whole concept of online shopping an unfulfilling experience. It’s too difficult to find what they want over the Internet. They need to ‘see before buying’, are suspicious of buying from unknown companies, won’t buy through an online auction and think it takes too long for delivery.

Boston Consulting Group and the Management Consultants Association have suggested that online retail shopping will appeal to those for whom time is at a premium – high earning professionals working long and unsociable hours, who value their leisure time and are already online.

Already, current consumer e-commerce is weighted towards certain goods and sevices which reflect the interests of the early adopters of PCs and Web technology (CDs, computer equipment and software). See Figures 4-7 below.

Jupiter and Fletcher have both issued sales forecasts in product sectors for Internet commerce to 2003. (All figures were converted from data originally denominated in euro.)

The breakdown of users by gender reveals that a widespread up take by women may present the strongest growth opportunity. They have already expressed to NOP surveys a stronger interest in using the Internet within a specified six month time scale than men. This adoption may well be accelerated by the convenience of e-commerce as long as women remain largely responsible for the bulk of routine household purchases such as grocery shopping.

The development of new platforms, in particular iDTV, will effectively level the playing field for the delivery of online services to all ages within the user population and to all socio-economic groups. However, the new technologies can create new social divisions or strengthen existing ones.

Examples of new areas of consumer interest are unpredictable but could involve entertainment (multi-player games, event participation) gambling, buying and selling shares and grocery shopping.

In a 1998 ICL/MORI survey, consumer interest in an even wider range of services was revealed:

The extent to which these services and product sectors develop is dependent on both service provision and delivery.