804 The Marketing Book
experiments and services having been with-
drawn, or failing to meet expectations. The
dotcom boom of the late 1990s was followed by
harsh re-evaluation of technology stocks from
- Porter (2001) concluded that the ‘new
economy’ is in fact the old economy, but with
access to new technology: the fundamentals of
competition remain the same.
Figure 30.11 summarizes the driving forces
behind e-tailing developments, in terms of
technology cost/availability, competition fac-
tors, consumer demand and regulations upon
conventional shops and shopping patterns.
Developments are also facilitated by increased
acceptance of, and familiarity with, home-
based technologies, plus an increased use of
remote payment systems. There are, however,
some major obstacles, notably concerns about
privacy and security, perceived risks in using
e-tailers and problems with home deliveries.
Figure 30.12 also points to potential areas of
social, individual, environmental and commer-
ical impact, if e-shopping becomes very
widespread.
However, while the dotcom boom was
fuelled largely by ‘pure Internet’ companies,
much of the development that followed was by
existing retailers, adopting hybrid channels of
marketing and distribution. Thus, Tesco
became the world’s largest Internet grocer, also
exporting its expertise in cost-effective e-tailing
to the United States. John Lewis acquired the
loss-making UK operations of the US e-tailer
buy.com, after which new customers were
added at the rate of 3000 per week. Unlike some
Internet start-up companies, these well-known
retail brands are able to overcome many of the
perceived risks associated with e-shopping.
It seems that consumers too are develop-
ing hybrid search and shopping behaviours. A
US survey of 5000 consumers showed that 34
per cent of store shoppers looked for or
purchased something in-store that they had
seen on the retailers’ website. Likewise, 27 per
cent looked for or bought something on-line
that they had seen in the store (NRF, 2000).
Consequently, while e-tailing may reduce the
utilization of physical stores, it seems unlikely
to replace them in most sectors. For most
shoppers, ‘clicks and bricks’ will play com-
plementary roles in helping to fulfil their
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