Online retailing a good idea that needs some work

THE period from 1995 to 2005 is often described as the Decade of Transition – transition from the old economy to the new economy.

In the middle of this transition we find more things are being measured and more statistics are being recorded and massaged than at any time in the history of the world.

New technology is emerging every day. Old technology that is worth keeping is getting faster, better and cheaper by the moment.

New products and services are appearing with great regularity.

Organisational structures and methods of doing business are being revised, scrapped or significantly modified on a regular basis and the half-life of intellectual property seems to be measured in months rather than years.

There is no better example of this revolutionary experience than the transition phase which retailing is going through at present.

The online economy has been in the pipeline now for a decade but it was never going to be a reality until online retailing became attractive to the masses.

For years telephones and televisions have made online purchasing of goods and services possible.

However it is Internet shopping that holds the key to the paradigm shift in people’s habits.

Australians are at the forefront of the world, with Americans, Cana-dians and a raft of European countries, in making use of Internet sites and services to shop online.

Online sales are growing, albeit from a low base, at a rate of 500 per cent a year and are expected to top $10 billion by Christmas 2001.

In 1997 Australians spent $40 million on the net. Last year this figure was $200 million and this year the figure is expected to be just short of $1 billion. The most common prediction for the year 2000 is $5 billion.

Of real significance, however, is the fact that the lion’s share of the transactions on the net in the past few years have been business-to-business rather than business-to-consumer.

Businesses have discovered the convenience of using the net to purchase such things as computers, travel and other services direct from suppliers.

Some estimates put the share to individual consumers as low as only 10 per cent of these turnover figures.

There are some reasons for this and it seems that the finger is pointing directly at people who design and build web sites.

Some months ago the Forrester Research Group did some research in the US and revealed that up to 66 percent of a control group they monitored abandoned their shopping carts in frustration.

The users found the experience of trying to purchase an item and complete a shopping transaction online too difficult and gave up.

This was not because of a lack of trust, security fears, over-pricing or difficulties in navigation but because the site was poorly planned or too obscure.

The Gartner Group recently released the conclusions of some research which gloomily suggests that up to 75 per cent of new e-commerce projects would end in failure because of a lack of good business planning and unreal expectations.

Web surfing is not complicated and most people using the net are reasonably educated. The message to those who design e-commerce sites is clear.

“Remember, the typical online customer will not be a senior Internet developer, but a technically unsavvy individual who does not work in the IT industry”.

• Mal Bryce is a consultant with Dow Digital and a former WA Deputy Premier.

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