The Marketing Book 5th Edition

802 The Marketing Book

Non-store retailing

In that telephone and Internet ordering has
largely replaced the posting of orders, the term
‘home shopping’ has largely replaced ‘mail
order’. In spite of numerous predictions that
home shoppping would take over a large share
of retail trade, its role in most countries is still
fairly modest. As Table 30.13 illustrates, home
shopping was estimated to account for 10 per
cent of non-food sales in the USA by 2003,
rather less in European countries.

Catalogue home shopping

In both the UK and the USA, the history of
‘mail order’ can be traced back to the nine-
teenth century. In the UK, networks of agents
sold through catalogues to ‘clubs’ of friends,
neighbours and fellow workers, as well as
collecting their payments. Their customers
were mainly urban working class and the major
attraction was the credit terms offered. In the
USA, the rural markets were the main focus,
these being inadequately served by other forms
of retailing.
By 1970, home shopping in the UK accoun-
ted for under 5 per cent of all retail trade,

reaching the end of the century at almost the

same level. However, much changed during

that 30-year period, with traditional ‘big book’

mail order and agency networks declining. The

entry of Next Directory breathed new life into

the sector, appealing directly to a much more

up-market clientele. More recently, other retail-

ers’ catalogues, television shopping channels

and Internet retailers have brought new impe-

tus to the sector.

Unlike most retail sectors, home shopping

is actually becoming less concentrated in the

UK, as some of the largest players continue to

lose share. As recently as 1990, GUS (Great

Universal Stores), which includes Kays and

many other catalogue names, held over 30 per

cent of the home shopping market: this had

fallen to under 20 per cent by the end of the

decade. Littlewoods also lost share during that

period, its second place challenged by Otto

Versand of Germany, which acquired both

Grattan and Freemans.

Next Directory, on the other hand, con-

tinues to grow, benefiting from the branding,

buying and logistical synergies of this multi-

channel retailer. GUS also looked to a multi-

channel solution to arrest its decline, through

the acquisition of catalogue showroom trader

Argos. A major advantage of the catalogue

showroom format is that goods can be selected

at home, stock availability checked by tele-

phone, goods then being collected (and inspec-

ted) at one of the showrooms, without having

to wait for home delivery. The combination of

GUS and Argos took the latter into mainstream

home shopping, with the option of home

deliveries, an expanded catalogue and a pres-

ence on digital television.

E-tailing

Electronic retailing has been a long time com-

ing. Commentators were predicting its arrival

35 years ago and, in 1980, Rosenberg and

Hirschman presented vivid scenarios of retail-

ing without stores. However, there have been

many false dawns for e-tailing, numerous

Table 30.13 Home shopping

shares of non-food sales

Country % Country %

Austria 7.5 Japan 3.1

Canada 2.8 Netherlands 4.6

Denmark 5.6 Norway 6.3

France 5.4 Sweden 4.2

Germany 7.0 Switzerland 4.4

Ireland 0.8 UK 7.5

Italy 0.6 USA 10.0

Source: Euromonitor (2000) estimates for 2003.