Home shopping hits ten year low” thundered one headline covering Verdict’s latest report on the home shopping market, which also poured scorn on the prospects of electronic commerce changing the face of British shopping.
But is the decline in traditional home shopping really bad news for electronic retailers?
The decline in the traditional home shopping market through agents doesn’t really come as a huge surprise, particularly when seen in the context of improvements made in retailing in the past few years, such as the growth of out-of-town retailing, and expansion of product ranges by supermarkets.
And the fact that this decline has not been matched by the growth in the mail order business must be of great concern to Littlewoods, Great Universal Stores, Freemans, and the rest.
It is unrealistic to imagine that growth in shopping on the Internet, in its current guise, will have a significant impact on countering this decline.
The demographics of the typical catalogue shopper aren’t exactly compatible with the home computer user. Not until digital television is established will electronic commerce for mass-market brands become a reality.
Even if the successful launch of digital TV does create the potential for mass electronic shopping, there are a whole host of behavioural and practical distribution issues that need to be resolved.
But the types of brands and products which are already carving out a retail market through cyberspace are becoming clear.
They tend to be KVIs – known value items – such as CDs, videos, software, books, airline tickets, and financial products.
I also suspect that more of us will be prepared to pay a small premium to have a regular shopping basket of standard items pre-packed, collected, and delivered.
But will retailers follow where some consumers, at least, want to tread? I believe it will be the Tescos of this world, as much as consumers, that will dictate the pace of change in the way that we shop.
Tesco’s experiments on the Net and home shopping trials in Ealing are enabling it to understand better a new way of trading, communicating with consumers and developing more personalised marketing programmes.
Its detailed knowledge of customers’ purchasing habits has already enabled it to predict how much of an appetite online Tesco customers have for electronic shopping.
Consequently, I doubt whether the leading supermarket retailers, and others, will take too much heed of the doomsday reports – preferring to rely on their own market judgement, trials and ability to move quickly into the sector once it is established.