Table Of Contente-shock 2000
Also by Michael de Kare-Silver
STRATEGY IN CRISIS
e-shock 2000
The electronic shopping revolution:
strategies for retailers and manufacturers
Michael de Kare-Silver
~
MACMILLAN
Business
©Michael de Kare-Silver 1998, 2000
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WlP 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
The author has asserted his right to be identified as the
author of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First edition of e-shock published 1998
Reprinted four times
Revised paperback edition published 2000
as e-shock 2000 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
ISBN 978-0-333-80233-5 ISBN 978-0-230-38967-0 (e Book)
DOI 10.1057/9780230389670
A catalogue record for this book is available
from the British Library.
This book is printed on paper suitable for recycling and
made from fully managed and sustained forest sources.
10 9 8 7 6 5 4
09 08 07 06 05 04 03 02 01 00
Copy-edited and typeset by Povey-Edmondson
Tavistock and Rochdale, England
Contents
Preface and acknowledgements vii
Preface to the Second Edition ix
Introduction
1 Overview: the key conclusions 7
2 Definitions and consumer trends 25
3 Learning from the pioneers in electronic selling 31
4 Future growth of electronic shopping: look out for 2005! 47
5 The ES test: how to tell how much your business is going to
be affected 71
6 How can retailers respond? 89
7 Ten strategic options for retailers 103
8 The store of the future 121
9 Rapidly improving technology meets growing consumer
demand 131
10 The world is changing: assets to knowledge 153
11 Structural difficulties with the Internet will be overcome 161
12 How can manufacturers respond? 173
13 Manufacturers' ten strategic options 185
14 The new marketing imperatives: marketing in the
electronic age 205
15 Setting the strategy and mobilising the organisation 227
16 The next wave in electronic shopping 245
Appendix 1: The retailer dilemma - can shops still be profitable? 261
Appendix 2: Retail banking case study 270
List of figures, tables and plates 277
Bibliography 280
Index 285
v
This page intentionally left blank
Preface and
Acknowledgements
The stimulus for writing this book came when I read announcements by
Wal-Mart, Home Depot, Tesco and others that they were opening new
stores, yet at the same time relaunching their web sites. Was this not a
contradiction in terms? Could retailers operate both physically and
electronically without one cannibal ising the other? Would not electronic
sales (presumably mostly over the Internet) significantly reduce numbers
visiting the stores and so the profitability of the physical space? Could
retailers just carryon as before investing heavily in land and buildings
while the virtual world beckoned ever more eagerly? Would that new
route to market eventually dominate? How many consumers were already
willing and interested in shopping electronically? When would it all reach
critical mass?
The purpose of this book is to answer those questions. The aim is to
provide a practical guide to the future consumer retailing scene, how
electronic commerce will develop, what impacts it will have, pin down
when it will happen and suggest a framework to help retailers and
manufacturer suppliers determine their optimum response. I have drawn
on many years of consulting experience with companies in different
sectors, observing and advising on market, customer and channel
challenges. Other research and interviews have been carried out, tests
and trials observed and evaluated and ideas checked with client
companies whose confidentiality I must respect but whose ambitions
and intentions are clear.
Forecasting future market developments can never be an exact science
but I have also been enormously encouraged in my conclusions and
convictions by a number of people. First, thanks to my partners at the
Kalchas consulting group and to new colleagues at CSc. They have
helped create the experiences and opportunities to write this book and
have been stimulating in their own thinking and perspectives. Others have
acted as important sounding boards, reinforcing some basic premises but
steering me clear of unwarranted prejudices. Among this group I would
like to thank David Stoddart especially, retail analyst at Henderson
Crosthwaite, and intellectual soulmate, Simon Wright of Virgin, Mike
Nevin of Dixons, Chris Warmoth of Procter & Gamble, a friend and deep
Vll
viii Preface and Acknowledgements
thinker, and Svea Kordt and Ragnar Nilsson of Karstadt. A few other
people have been more generally inspirational in encouraging me to put
pen to paper. I am grateful to Robert Heller, whose own writings and
teachings constantly challenge the status quo, Lord Peter Walker, whose
own achievements continue to set a benchmark, and Walter Goldsmith, a
constant fount of energy and ideas.
As for the composition of the book, it could not have happened
without the vision and support of Stephen Rutt, my publishing editor,
and also Elaine Howells and Louise Crawford, whose marketing
enthusiasm has been infectious. David Oates, author and writer in his
own right, provided a critical role early on helping to organise initial
musings and ideas, writing up some early drafts and providing additional
context. As for the typescript, especial thanks to Jo Mountford and
Lorraine Oliver who in their personal time painstakingly transcribed my
physical labours into ordered electronic prose. Finally, but most
importantly, a special thanks to my wife, Deborah, whose sound
commercial instincts and critical appraisal have helped keep the ideas
here firmly rooted in what is practical and achievable.
Michael de Kare-Silver
Note: The author and publishers are grateful to Netscape Communications
Corporation for permission to use material on the jacket of the book. However,
Netscape Communications Corporation has not authorised, sponsored, endorsed
or approved this publication, and is not responsible for its content. Netscape and
the Netscape Communications Corporate Logos are trademarks and trade names
of Netscape Communications Corporation. All other product names and/or
logos are trademarks of their respective owners.
Preface to the Second Edition
Since the first edition of this book, the e-commerce revolution has really
taken hold. In the course of just twelve months we have seen almost daily
new technology innovation, pioneers changing the rules of the game and
a rush of companies trying to take advantage.
• 'Internet access can now be obtained for free! Dixons Freeserve has
turned the Internet world on its head and rivals are rushing to put out
free services of their own.'
(Wall Street Journal)
• 'PCs for free! FreePC.com was first to market and others are
following.'
(Computer Weekly)
• '$1 trillion is the forecast for e-commerce in year 2000.'
(John Chambers, CEO, CISCO)
• 'By 2002, almost every mobile phone will be web capable.'
(New York Times/Yankee Group)
• The Internet population will reach nearly 100 million adults in the
USA alone in 2000.'
(IntelliQuest)
No-one now dares to suggest e-commerce will just be a minority interest.
Indeed as CBS Market Watch and others have pointed out, there are as
many women as men now shopping on-line: 'women dominated the 1998/
99 holiday period accounting for almost 60% of on-line shoppers'. It's no
longer a question of if or when it will happen. It's now a case of: 'how
quickly can we get on board, how can we take advantage and how come
we let others get ahead of us?'
But the real issue is whether sales over the Internet are beginning to
affect bricks 'n' mortar stores? Will e-commerce reach a point sometime
soon where 'traditional' retailers find their consumers preferring to buy
electronically and so visiting stores less?
ix
