Companies are recognising the threat posed by this new phenomenon Shop until you drop - into your favourite living room armchair The total value of transactions on the Internet will reach £380bn by 1999 says an American analyst
THE question is not if home shopping will take off but when, according to research by Inteco. The second question is who is likely to suffer most and earliest. Graham Taylor, managing director of the market research company, said the most vulnerable trades were travel agencies, insurance brokers and music-video retailers.
Daewoo was also pointing the way for car makers, which within a few years would be able to dispense with local dealers and, via the Internet or some on-line system, offer a lower-priced deal direct to the consumer.
Retail trade in other areas could be hurt as well. Jewellery and clothing can be easily bought on the home shopping systems being created which will at first supplement and then replace mailorder catalogues, says Inteco research.
Other transactions such as banking will increasingly move on to home computers, but for some time the established institutions will continue to run them. On the other hand, their requirement for premises and manpower will fall steeply. The American analyst Killen Associates thinks transactions on the Internet will reach £380 billion by 1999. The signs are already there. Royal Bank of Scotland has for some time been running a successful home banking system and Barclays has introduced BarclaySquare. British Telecom has just expanded its on-line provision of films on demand, children's television, music videos, shopping, games, advertising and banking-all down the telephone wire.
An indication of how seriously the retail trade consider this threat is the fact that W H Smith,
Thomas Cook, Selfridges, Freemans and Olympus are in the trial. In addition there are
Dorling Kindersley, Amstrad and Apple, Audi, Vauxhall, Rover and Honda, Sun Alliance
and Norwich Union.
The easiest products to deal with are for digital delivery. That includes music and video, books and news, plus services like banking and tickets. After that the order may be placed electronically, and probably paid for through some secure credit card system, but the delivery would be by an old-fashioned lorry.
The choice of many people to withdraw cash from the machine outside rather than the person inside, even when it is raining and there is a queue at the dispenser, shows people prefer machines to dealing with humans. Another sign of the same trend was Barclays Bank in June setting up BarclaySquare, an electronic shopping arcade on theInternet. It has wines from Sainsbury, books from Blackwellsand gadgetry from Innovations.
