These variables are predicated on a number of technological, policy, social and commercial drivers. Two of the scenarios – the Sluggish and the Active – follow the standard market assumptions which portray e-commerce as a PC-based medium. In contrast, the remaining two – Dynamic and Explosive – pre-suppose widespread adoption of DTV and other new media as vehicles for a broad range of interactive services.

Figure 8 shows that when extrapolated to 2005 from the usual end point of 2003, the market within the Explosive and Dynamic scenarios is well above the upper end of the estimates provided by available research.

Taking into account the likelihood of further Government information society initiatives and the possibility of different types of media becoming available for e-transactions, the level and intensity of e-commerce begins to look increasingly substantial.
All four scenarios assume that more affluent groups will continue to spend more and that spending on e-commerce will be proportional to the levels of uptake, roughly the same proportion of consumer expenditure for each group. It should be remembered that within the scenarios of rapid e-commerce growth, even as small a share of the total as 13% is a considerable amount of expenditure, well over £3 billion per annum.

Online services

Developments and innovations in ICTs and their interface with consumers are likely to have the greatest impact on the growth of e-commerce in the UK. Currently, competition between the different technologies and services is fierce.

The PC-based approach is by now familiar, but a strong emerging contender is iDTV. Online links can be direct between the consumer and retailer (and local branches) or through intermediate services. There is considerable scope for specialist ‘portals’ or ‘malls’ organised around geographical areas (aimed at visitors) or niche consumers (specific hobbies or cultural interests). As well as linking consumers with conventional high street services, other significant developments could include direct links from consumer to manufacturers, signposting the trend towards ‘mass customisation’.

For example, vehicle manufacturers may ultimately sell to the consumer themselves and leave the high street to deal with delivery. New customer-centred services such as online auctions could well become significant with a rise in consumer-to-consumer advertising and sales.

From a smaller initial base, innovative developments in alternative money transactions could develop such as Local Economy Trading Schemes and variations of the ‘electronic purse’.

Delivery systems: When a consumer makes an online purchase there obviously has to be a system of delivery. ‘Infotainment’ products such as information, software, music and video can be delivered electronically.

However, the majority of products need physical transportation. It is still not clear which systems of delivery and distribution will emerge as e-commerce takes off, but they will, ideally, be based on combining co-ordinated activities which bring economies of scale, flexibility and speed with attendant environmental benefits and innovations in delivery.

The use of community services such as the milk round, mobile libraries etc., could reach those social groups potentially otherwise excluded with varying points of delivery, e.g. local shop, post office or community centre. Evening, weekend and other ‘out-of-hours’ delivery may become commonplace, accompanied by built-in ‘smartness’ such as alert functions which inform both supplier and purchaser.

The advent of home automation could facilitate this by the use of novel devices or ID functions allowing access to the home or its immediate precincts.

Payment systems: Payment may involve smart cards, registration of conventional credit card details, the use of online banking and financial services, or electronic cash.

The non-availability to some social groups of ready sources of credit and electronic cash could become increasingly a factor limiting their uptake of e-commerce. Social policy has a role to play in introducing novel payment systems and thus facilitating e-commerce as a transactional medium.

Private sector initiatives building on current loyalty schemes and credit cards may be more likely. Smart cards or debit cards associated with DTV and iTV systems and designed to support small payments could offer a wider outreach. There may, however, need to be built-in safeguards against dishonest use or in-family misuse.

Regulatory and policy context:The Government’s policy towards the ending of analogue television will crucially affect the take-up of DTV. Likewise, the decision affecting the roll-out of Asymmetric Digital Subscriber Line (ADSL) and similar high-bandwidth services will give further impetus to the development and take-up of new technology. Policies and initiatives being promoted by national and local government to include all social groups within the ‘information society’ could shift e-commerce development into the Explosive scenario.

Competition policy is likely to become an important issue if DTV or iTV based e-commerce takes off rapidly with implications for cross-media ownership, strategic alliances between media, retail and financial companies and the participation of smaller enterprises in consumer e-commerce. Competition policy may also affect retailers’ use of e-commerce to offer special incentives. A balance needs to be struck between an unregulated market and regulation which could be a disincentive to service provision. Public service responsibilities will be required if e-commerce is to be part of a portfolio of socially useful services, but commercial initiatives could be undermined by non-commercial services.

There is already concern that proposed polices over privacy and encryption. While these may be designed to allay fears of fraud and infringement of civil liberties, these may actually rein back the advancement of new media. In opinion poll studies of worries about e-commerce, these fears predominate, but it should be remembered that the use of credit and debit cards has grown despite similar concerns.

Small firms: The scope for SME entry into e-commerce is extremely significant – if entry costs are low enough and technical skills not too daunting. Some local retailers and service providers will be able to extend their markets and offer enhanced low-cost services using the new technologies. The role for local intermediaries could be to offer support services to minimise investment of time by SMEs in learning the mechanics of Website design and administration.

Ways of life: It is a valid question how far traditional shopping has become a leisure experience rather than another domestic chore – the answer probably depends both upon the social groups involved and the types of goods and services being exchanged. If e-commerce reduces the need to travel to certain shops then there may arise a need to discover new outlets for out-of-home leisure, status differentiation and display, and the like.

High street issues: E-commerce is only one ingredient in the mix of social, demographic and economic forces that are reshaping the high street. Rationalisation and a shift to unstaffed premises in financial services is continuing and will be emulated in other areas, perhaps in estate and travel agencies. While it is possible that e-commerce could be perceived as being responsible for current trends impacting on the high street, it need not be seen as a substitute for existing retail. It may be complementary or involve novel transactions and services. The make-up of the high street could continue to evolve from retail towards a service sector orientation.

High street shops may find new opportunities from e-commerce. Local outlets may offer enhanced services such as delivering higher levels of customisation and new functions such as community facilities and play areas added to existing outlets. Local retail outlets may place greater emphasis on delivery, storage, repair, service etc. In some cases the main transaction and physical inspection of goods may remain a local function while background research and decision-making is carried out online; products may be ‘browsed’ online then purchased and collected in the high street.