radio, would fade into obscurity) until such a time that it became clear that there would
be tangible business benefits from making the investment required to develop an
online presence.
2 Active: companies that saw the Internet as a tremendous opportunity to access and
develop new markets on a global scale. For these companies the approach towards
Internet adoption was more complex as they had to determine how to trade success-
fully in this new virtual environment. Many companies adopted an incremental
approach, testing out the feasibility of technological solutions.During the last five years the inactiveretailers have increasingly come under pressure
to accept the Internet as a durable trading environment, whereas the activeretailers have
been dealing with many difficulties associated with their early investment into e-retail-
ing. Operationally, e-retailers have had to organise their companies to cope with a range
of issues, for example logistics, distribution and increased financial demands, and stan-
dards of online customer service. From a more strategic standpoint, retailers have spent
time developing their online offer and determining how to deliver value.
A five-year study examining the extent of Internet adoption in the UK by Ellis-
Chadwick et al. (2002) has found that traditional retailers are increasingly likely to have
a web site and offer online trading facilities. Retailers as a whole are seen as being highly
advanced in their use of computer-based technologies, so it comes as no surprise that
some retail companies were quick to explore the commercial potential of the Internet.
Typically, a newly established retail web site aims to cover a range of business objectives
and show limited evidence of targeting of content towards specific online consumers;
corporate information for investors is presented alongside details of consumer promo-
tions and graduate recruitment features. However, over time the focus and strategic
contribution of the online channels has changed and e-retailing is rapidly expanding.
Figure 10.3 suggests how the strategic focus might change over time.From 1995 onwards, retailers continued to develop their own web presence in
the form of destinationweb sites in a similar way to the development of a fixed-location
destination storein the real world. Web solution companies have aimed to provide solu-
tions to drive traffic to a growing number of e-retailers’ online offers. However, this is not
the only approach being taken; many online goods and services are sold through portals
or e-malls (see Mini Case Study 10.3). Currently e-retailers are focusing on producing sus-
tainable and profitable business strategies for their Internet-based operations. Established
retailers using physical channels to market as well as the Internet are now demonstratingE-RETAILINGA crackeris a malicious meddler who tries to discover sensitive information by poking around
computer networks. This term is sometimes confused with ‘hacker’. According to The New
Hacker’s Dictionary(Raymond, 1996), a hacker (originally, someone who makes furniture with an
axe) is a person who enjoys exploring the details of programmable systems and how to stretch
their capabilities, as opposed to most users, who prefer to learn only the minimum necessary.Discussion point
Tesco.com, has established a position of being the world’s leading online grocer with an esti-
mated sales turnover of £401m and profits up 37% to £21m (as at 21 September 2005).
However, Iceland was the first UK retailer to offer nationwide delivery of a range of groceries
ordered via the web and yet they have ceased to offer this service. Why has Tesco.com been
able to establish such a dominant market position?Destination store
A retail store in which
the merchandise,
selection, presentation,
pricing or other unique
features act as a
magnet for the
customer (Levy and
Weitz, 1995).