Electronic Shopping
Online retail growth will primarily be propelled by increasing numbers of people shopping for grocery. By 2006, Verdict forecasts that 5.7% of all grocery sales will be channelled through online media. This will be 40% of total retail online sales worth £14.4bn.
Key Issues:
First mover advantage is no guarantee of ongoing success: the number of new online shoppers means loyalty is rare.
Average online spending is rising, but not so much for women as men – retailers need to motivate them more
Cost effectiveness is the key reason for consumers to buy online: low price alone is a much lesser motivation
The four main business models currently in B2C will soon become three, as the future for pure online players looks bleak
An analyses of the positive and negative impacts on the UK online shopping market 1999-2006:
1999 – few retailers with transactional ability
2000 – delivery failures
2001 – inconsistent technological patterns
improvements to delivery
popularity of trusted brands e.g. grocers and books
2000-2002 cost of broadband restrictive
2002 – GPRS/increased m-commerce. Costs of broadband becomes affordable
2000 – 2003 broader socio-demographic customer profile (more women and younger people 15-24+)
2003 – boost in take up of i-TV
2004 – i-TV reaches critical mass
2006 – online penetration reaching peak
