Shopping at your convenience

With Asda’s announcement last week that it is to be the latest supermarket chain to launch a home delivery service, the future of store-based retailing has again been called into question.

There are some who argue that we will see a significant increase in home shopping services because of consumers’ increasingly busy lifestyles and that traditional retailing is likely to be threatened by the growth in remote shopping.

But they are probably being somewhat optimistic, (or pessimistic, depending on your point of view). Mintel’s report (Home Shopping, 1998) suggests that, while some people are certainly receptive to the idea of shopping from the comfort of their own home, such “virtual shopping” is unlikely to completely supplant the real thing.

Home shopping is hampered by the lack of personal contact inherent in remote transactions. For many consumers, seeing, touching and trying the goods is an essential part of the purchasing process and cannot be replicated through home shopping.

This necessarily creates a degree of polarity in views among consumers, as there are definitely those who will and those who will not shop remotely.

It is also the case that, for some, shopping itself is something of a leisure activity. These consumers may use some form of home shopping to complement their main shop, but it will never replace the physical shopping trip as a source of enjoyment.

There will certainly be growth in home shopping over the next few years. Mintel forecasts the home shopping market will grow in value to more than 10bn by the end of the decade. On current projections of retail sales growth, this means home shopping companies will increase their share of retail sales to 4.5 per cent by 2002.

The growing number of people working part-time, coupled with the demand for more flexible hours of working, contributes to a need for more variable hours when it comes to shopping too. The idea that place of purchase as well as time of purchase can be flexible is an appealing one to many people.

Home shopping, of course, is not a new idea: but it can be argued that the attention which has been paid by the press, retailers, manufacturers and consumers alike to the development of home delivery services by the supermarket chains and also to various online home shopping services, has helped give shopping in general and mail order in particular a more exciting image.

Mintel research shows that existing users of mail order are rather less excited by new technology delivery systems than they are by more mundane matters. The most popular improvements in mail order shopping services would be more competitive prices – to put it on a par with the high street – and improvements in service levels.

In particular, young adults and the less affluent want better prices and more special offers. More affluent shoppers are the most demanding when it comes to service level improvements, their main areas of concern being shorter lead times, better organised deliveries and greater accuracy in the content and presentation of catalogues.

Easier returns are another specific aspect of service levels that concern existing and would-be users. Operators are under pressure to make the delivery and return sys tem as seamless as possible, without adversely affecting the competitiveness of retail selling prices.

Technology will certainly have an increasing role to play in the future, and the development of TV and PC-based systems is affecting consumer perceptions of how home shopping might evolve.

The enabling technology to facilitate home selection and ordering of goods is available in several forms, each of which appeals to different types of consumers.

Two (virtually) universally accessible forms of communications technology, TV and telephony, are about to be linked through the new digital TV networks. Digital TV, both through terrestrial and DTH cable and satellite, has considerably more channel capacity than analogue networks.

This will create opportunities for many different types of programming, which existing networks do not have the capacity to carry.

More importantly for home shopping, the link with telephony will enable interactive comm unications between broadcasters and viewers.

Home shopping will increasingly become a “smart” way of shopping for consumers who currently make only limited use of mail order and direct ordering.

Convenience is such an important influence on consumers today that home shopping is bound to bene fit, especially as new technologies, including TV-based technology, create an image which is both contemporary and appealing to a new type of home shopper.

The image of the home shopping industry is changing, driven by the launch over the past few years of a range of direct selling companies, including more upmarket mail order companies, and by the entry into the market of major retailers.

The marketing spend by those involved in home shopping has increased enormously, as both old hands and new entrants seek to attract more affluent, convenience-oriented and technologically-aware shoppers.

The entry of major retail names from the high street adds weight and credibility to the sector and is widely seen as being beneficial in attracting new custom to home shopping.

This will put pressure on agency mail order companies to step up their diversification into direct mail order as well as putting more competitive pressure on existing companies.

The sector will increasingly be about providing the highest standards of service to home shoppers in order to attract the most desirable type of consumer.

The companies which best meet these needs will be the winners in this sector in the future.

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