If the e-commerce evangelists are to be believed, it won’t be long
before we all spend much of our day frantically keying orders for
everything from courgettes to cars into our PCs, interactive TV sets and
web-enabled mobile phones.
Of course, some of the predictions will turn out to be wide of the mark,
but there seems little doubt that the growth of e-commerce is gaining
momentum. By 2003, Forrester Research expects internet shopping to
account for 6% of US consumer expenditure. Datamonitor anticipates that
one in three households in Europe will be connected to the internet by
In the UK, 11.5 million adults have already used the internet, according
to Continental Research. Nearly one in four has bought a product or
What is interesting is that so much attention has been focused on just a
few sectors. ’Pure-play’ internet retailers (those that only sell over
the internet) in book, CD, travel and auction markets have done a great
deal to pioneer internet shopping, but this does not give the full
All kinds of retailers are finding new ways to market and sell their
In the UK, for example, the relatively conservative clothing group,
Arcadia - home to Top Shop, Principles and Racing Green - has online
shops for each of its brands. It has also launched Zoom, an online
shopping gateway, at www.zoom.co.uk.
While internet grocery shopping is likely to remain restrained by the
costs involved in the home delivery of a full range of grocery products,
specialist food and drink retailers are discovering that internet shops
are suitable outlets for products. Heinz, for example, has set up
anonline shop (www.heinz-direct.co.uk) to cater for the tastes of
The impact of internet commerce on business-to-business trade has been
widely overlooked. E-commerce is expected to change profoundly the way
that businesses buy and sell products and services to each other.
IDC forecasts that internet commerce as a whole will be worth more than
dollars 1trillion by 2003, as more consumers shop online, the size of
the average transaction grows and the web is adopted as a viable vehicle
for generating business.
As the four examples (see boxes) illustrate, the range of companies
forming successful online links with consumers is growing - without a
CD, holiday or book in sight.
Totalbet (www.totalbet.com) is the Tote’s online betting site. It was
set up as a joint venture with the sports news site PA Sporting Life,
itself a joint venture between the Mirror Group and the Press
Totalbet went live on April 10, to coincide with the Grand National.
’We realised a long time ago that the internet was a medium that had a
fairly major future and we wanted to have a major presence,’ says Rob
Hartnett, public relations director. ’We wanted to do it in partnership
with someone who had internet capability, and the site set up by PA
Sporting Life was by far the most popular in Europe.’
When it was launched, the site was only able to take bets for the Grand
National, but the range has since been extended. ’In the interim we’ve
added other events and sports - soccer, rugby league and union, motor
racing, golf and cricket,’ says Hartnett.
Totalbet also carries editorial content from the Sporting Life site.
’The site has built up 5000 registrations in its first three months,’
Hartnett adds. ’To put that in context, our telephone betting operation
has 50,000 accounts and it’s one of the biggest in Europe.’ The level of
online business per bet is higher than for the Tote’s telephone betting
service, which is in turn higher than it is in shops. Hartnett says this
reflects the fact that internet users still tend to be relatively
To promote the site, the Tote initially relied heavily on its link with
Sporting Life. An online and print advertising campaign was launched at
the end of July, targeting sports sites and newspaper sports
Totalbet also sponsored three horse races.
The introduction of pool betting to the site is also scheduled for the
The Tote has the exclusive UK licence for pool betting on horse
Because this form of betting requires less human intervention than
bookmaking, which involves complex risk assessment, it is expected to be
well suited to the internet.
DigitaVision, a provider of digital images to media businesses, was
established in 1996. It set up a web site (www.digitalvisiononline.com)
in summer 1998 to sell its images over the internet. The current refined
version of the site went live in January 1999. The company anticipates
that its entire business will move to the internet within five
DigitalVision started using the net ’because it was a good fit’, says
Tracey Tannenbaum, marketing manager.
The company’s images were already available in digital format. Internet
technology makes the process of selecting, buying and using images
faster, more flexible and convenient.
Typically, customers browse through catalogues, place an order and wait
for the delivery of prints or slides, which are easily lost or damaged
and must also be stored or returned.
At DigitalVision’s web site, which holds more than 10,000 images,
customers can search for and preview images, download selected images
from the site for immediate use and pay online. ’We focused on making it
easy to navigate,’ adds Tannenbaum. As in other consumer areas, users
become frustrated if web sites are slow.
More than half of the company’s customers already use the site to
preview images before they buy, even if they don’t order over the
Activity at the site, which recorded 1.5 million hits in June, is
growing at a rate of 500% a month.The internet gives DigitalVision an
international reach via distributor web sites - many of which are based
on the DigitalVision web site model - in 50 countries.
There are a number of strands to the site’s promotion.
’To keep people coming back to the site and to promote a new catalogue,
Contexture, one of the things we’ve done lately is run a competition to
win an iMac,’ says Tannenbaum.
The competition runs on a micro-site - www.imac.digitalvisiononline.com
- until September.
An e-mail newsletter goes out to everyone on the database, to back up
sales letters and postcards promoting the site. ’We also do promotions
on the web, rather than a loyalty programme,’ Tannenbaum adds.
Until the end of September, clients who spend pounds 500 online receive
Virgin vouchers worth pounds 100, while those who spend pounds 1500
qualify for a Sony Minidisc player.
About 200 people a week download a screensaver from the site.
Molton Brown, the premium UK niche cosmetics brand, opened its online
shop, at www.moltonbrown.com in July.
’The philosophy is quite logical,’ says Charles Denton, the company’s
sales and marketing director.
’We’re a lifestyle brand and the products evolve to match our customers’
changing lifestyles, so it’s natural to match the changing way that they
’We wanted a fast, hassle-free e-commerce solution that enabled
customers to buy Molton Brown products within a couple of clicks.’
The site’s performance has exceeded expectations. ’The number of
visitors is much greater than we expected and the customer profile is
very exciting,’ says Denton. Originally it was thought that the site
would not show a profit for six to 12 months. It is now expected to do
so within three months. The average value of sales from the site is
higher than that of in-store sales. ’It’s not cannibalising sales,’ adds
Denton. ’If anything, it’s driving people to stores.’
Denton says that Molton Brown plans significant investment to develop
the site in three stages over the next 18 months. ’The third stage will
be a fully interactive site which allows us to communicate with our
customers on a one-to-one basis.’ The internet offers a critical reach
into global markets. ’Molton Brown is a small company in a very
competitive world, but this enables us to compete on a level playing
field,’ says Denton.
A section on male grooming is prominently placed, recognising men are
still the most eager internet shoppers.
The biggest problem faced by the company was how to accurately represent
product colours on the web. Another limitation is that consumers who
enjoy testing products in-store aren’t able to sample products online -
BERRY BROS & RUDD
Berry Bros & Rudd is a privately-owned specialist wine retailer that can
trace its origins back to 1698. In 1995, it became the first UK wine
merchant to have a web site, says John-Paul Cockain, Berry’s internet
Initially the site, at www.bbr.co.uk, acted as a shop-window. In
November 1998, it became a shop in its own right. ’With internet
shopping expected to explode, it just seemed to us that the time was
right,’ explains Cockain.
The site is regularly reworked to improve navigation. It focuses on
Berry’s 300-year history to build trust in online shopping, and features
special offers and J-P’s Wine Surgery, which explains wine
The internet shop now accounts for 5% of Berry’s London-based sales,
with 60% of internet purchases made by new customers. About 40% of sales
are to customers outside the UK. ’The internet has certainly opened us
up to a much broader audience in the UK and overseas,’ says Cockain.
Berry also supplies international shoppers through its duty free shop at
Heathrow Terminal 3, which opened in 1994.
The company used print advertising and internet banner ads to promote
its online operations. The bulk of its online advertising is focused on
sites where visitors are likely to be comfortable with online shopping.