connected on high-speed Wi Fi systems and those still using the dial-up
internet access. In France the adoption of the Wi-Fi system has become
almost a national obsession. The governing authorities of Paris strive to make
the city the Wi-Fi capital of the world with 3,000 ‘hotspots’ implemented by
the end of 2005, including bus routes and underground train stations. These
are in addition to the wireless spaces provided by telecommunications
companies such as Orange. The increasing availability of internet connection
directly impacts the retail of goods online. It is also fuelling the rapid increase
of the e-retail economy, which is currently growing at a rate of 45 per cent
year-on-year, according to IMRG.
The adoption of the internet is spreading among different age segments of
the consumer society that has extended beyond young consumers. For exam-
ple, the number of European seniors with Internet access was 15 million in
2005 and this figure is on a steady rise. This consumer group also has the
highest disposable income in Europe and more shopping and leisure time;
therefore they constitute an important online luxury consumer segment.
The United States, which is the largest global retail market, also has the
highest growth rate of both internet penetration and e-commerce. In 2000,
more than 40 million US households had online access. In 2006, more than
one-third of all households in the entire US population make at least one
online purchase each year and this figure is expected to increase steadily.
Internet retailing is also the US retailing industry’s fastest-growing distribu-
tion channel. Retail sales on the internet totalled $87.5 billion in 2004, an
increase of 25 per cent from the $70 billion figure in 2003 and an increase of
62 per cent from the $54 billion in 2002. Also, the Internet is now the primary
communication medium for US teenagers who constitute an important future
market for luxury brands. In a recent poll by AOL, 46 per cent of 12–34-year-
olds voted the internet as the most essential communication medium to their
lives. Wireless network is also gaining popularity in several US cities and
major software and telecommunications companies are installing ‘hot-spots’
in thousands of locations enabling the access and convenience of online
shopping.
Current indicators also show the online consumer population is growing
steadily and rapidly. A large proportion of these online consumers are wealthy
and they make frequent purchases online. For example, approximately one-
quarter of the US online population in 2000 had annual incomes of over
US$75,000. This figure has doubled in the last five years, indicating an
increasing online luxury consumer market. Also the US had a forecast online
retail sale projection of $316 billion in 2005, an increase of more than 100 per
cent from 2004, indicating a substantial growth rate, fuelled by online
consumers. Also, the e-retailing sectors in the UK, France, Germany, Spain
and Italy are increasing rapidly.
E-retail is also currently a part of the daily activities in several Asian coun-
tries. For example in South Korea, which has one of the highest Internet
chapter 6 181digital luxury