Retailers such as Amazon Books and Wal-Mart, both of the U.S., are already using the Internet to build their business and extend their geographical reach to areas where stores can't be justified.
But now consumers are proving increasingly prepared to go cyber shopping for products previously considered totally unsuited to the medium - notably fresh food, says Jane Westgarth, research associate with Euromonitor and author of "Retail Trade International 1998," a new report on global retail trends.
There are three main drivers for the growth in Internet shopping, according to Ms. Westgarth.
Firstly, increasing numbers of consumers have access to the Internet. In Canada, 30% of households have a connection, and there are also sufficiently high rates of access in the U.S., Japan, Hong Kong, Singapore and Korea to make the Internet a worthwhile sales channel for retailers. In Europe, Euromonitor forecasts an "explosion" in retailers' use of the World Wide Web as a sales tool over the next two to three years.
Also, Internet Service Providers are making Internet access easier and more appealing for consumers all the time, encouraging advertisers to pay for their running costs so that they're able to offer the service for free.
A second reason, says Ms. Westgarth, is that retailers perceive computer shopping as a "useful and relatively inexpensive way to deal with their consumers.
"It doesn't require very much investment, in a comparative sense," she says. "The barriers to entry are relatively low." Current concerns - about the security of giving financial details over the Internet, for instance - will be resolved by the major software suppliers, Ms. Westgarth believes.
Finally, consumers are more willing to trust retailers now, compared with 10 years ago, she says. Improvements in product quality and consistency, along with higher standards of customer service, have helped make consumers feel more confident in the retail offering, however it is accessed. "Retailers are now trusted to champion the consumers' cause rather than that of manufacturers or the government," Ms. Westgarth says.
However, Euromonitor stresses Internet shopping is not about to replace the more conventional trip to the store. Hypermarkets and supercenters (offering a mix of food and non-food) will continue to dominate retailing around the world for the foreseeable future, the report concludes.
Copyright June 1998, Crain Communications Inc.