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The Internet and Other New Ways of Shopping

The Internet and Other New Ways of Shopping

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it is a brave person who would venture firm forecasts of how the applications and uses of technology will develop over the coming decades. We have lived through the dotcom boom and bust and, indeed, through some bold predictions. Gary Hamel, one of the leading business strategy gurus of the time, was one of those predicting a ‘convulsive development’ in retailing in the 1990s.
it is a brave person who would venture firm forecasts of how the applications and uses of technology will develop over the coming decades. We have lived through the dotcom boom and bust and, indeed, through some bold predictions. Gary Hamel, one of the leading business strategy gurus of the time, was one of those predicting a ‘convulsive development’ in retailing in the 1990s.

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Published by: Capital Computer Group, LLC on Feb 12, 2013
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09The Internetand Other NewWays ofShopping
t is a brave person who would venture firm forecasts of how theapplications and uses of technology will develop over the comingdecades. We have lived through the dotcom boom and bust and,indeed, through some bold predictions. Gary Hamel, one of the leadingbusiness strategy gurus of the time, was one of those predicting a‘convulsive development’ in retailing in the 1990s. He argued that easycost comparisons – ‘frictionless capitalism’, as Bill Gates calls it – made
I
 
possible by the internet would drive down retail prices. ‘Money comesfrom knowing people won’t comparison shop,’ said Hamel. ‘People makeenormous amounts of money out of friction’ (
Financial Times 
, 11September 1998). He foresaw the existing supermarkets ending as darkhulks around our cities, and he predicted that the firms that took over would not be those currently dominating the market, as had happenedbefore. He was wrong on all counts – at least so far.We now live in an internet age, when the majority of households haveaccess to the web, and online shopping is familiar and well establishedin most advanced countries; in the UK, 63 per cent of households hadbroadband access in 2009.
Why should new ways of shopping beneeded?
We know that new technology – or rather the entrepreneurs involved inand surrounding it – looks for problems to solve. In the end, it is themarket that decides, when consumers are convinced that the newproduct offers them real benefits, in a form they like and at a price theyare ready to pay. What forces suggest that there is a need for new waysof food shopping?We know that some social groups already have serious problems withfood shopping, especially those in some deprived areas, the old, thosewithout cars, and those living in the wrong place: it is a problem of access. Most of us, from experience and anecdote, would agree thatthere are other problems: time, traffic, parking, queuing, wobbly wheelson shopping trolleys, screaming children (other people’s or our own) andso on. The retailers are tackling many of these, but there are residualissues around the fact that much supermarket shopping is repetitive andunrewarding. As people’s lives become more crowded, alternatives thatwill save time or effort may be attractive.
What do we mean by ‘new ways ofshopping’?
Discussion of home shopping often focuses on the internet to theexclusion of other modes. In fact, there are many ways in which thetraditional shopping model – customers go to shops to buy what theywant – could be adapted. Some of these are long-standing, such as mail
 
order and catalogue retailing. Internet shopping is, in some ways, just atechnologically advanced method of mail order.The basic variables of the shopping process are six:product and service range;pricing;fulfilment;service provider;interface between customer and service provider;point of order.From these flow almost 40 possible solutions.Some of these are simple and are available now. A shopping list,produced from loyalty card data, can be produced by swiping the cardwhen the shopper enters the store; store staff could pick the routine,packaged items while the customer spends time on the more enjoyabletasks of choosing fresh produce and wine, or has a snack, or indeedgoes somewhere else (if there is anywhere else to go within reach).Other experiments use telephone, fax or internet ordering, while someoffer home delivery.In fact, we should separate the two main aspects – order capture andphysical delivery – as they are quite distinct and can be tackledseparately.
What do consumers want?
‘The issue is not remote shopping but how to service customers,’ saidone retail executive. We cannot generalize about customers as if theywere all the same. We know that they are very different, with differentneeds, preferences and resources.We know that there is a segment that welcomes internet shopping.Originally, they were mostly young, ‘time-poor, cash-rich’, computer-literate, with fast access to the web at work or at home, and willing topay for a service that gave them value. The ability to order from their desk appealed to them, as it saved time and avoided the unpleasantaspects of shopping (crowds, queues, traffic). They are confident in their ability to choose the right products, and not particularly interested inbrowsing (around supermarket shelves, that is). Internet shopping hasnow spread well beyond this group to embrace more and more of thegeneral population, although it is still age related. The peak age groupseems to be 35–44, as younger people use the internet most, but not for 

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