| RETAIL Vs E-TAIL Online retailing seemed dead and buried at end of the 1990s – when the years of speculation by investors and the consequent inflated share prices ended in the misery of the 'dot com crash'. High-profile casualties such as clothing specialist boo.com gave the whole sector a bad press, making it unattractive to investors and operators alike. Today, companies which commentators predicted would also die a rapid death, such as lastminute.com and amazon.com, are getting stronger and stronger. Hosts of smaller 'e-tailers' are also finding that their hard work has led to quantifiable financial rewards. As a result, banks and commercial landlords are no longer wary of the sector. In the US, online retailers saw sales grow by 24% in 2004, according to a market research company Forrester. The same survey, which was commissioned by shop.org, the American online retail association, predicted that sales would increase by a further 22% in 2005. A phenomenal 48% of computer products are now purchased online, followed closely by tickets (28%), travel products (26%) and books (20%). Feminisation of the internet It is expected that the main areas of growth will be jewellery, luxury goods, flowers, cards and gifts, the research claims – mainly owing to the increasing feminisation of the internet. Scott Silverman, shop.org Executive Director, says: "Although initially adopted by men as a shopping tool, women are now flocking to the internet in droves to comparison shop, research, and buy. "Online retailers who sell products that are purchased by women are in a favourable position this year, as we expect those categories to grow substantially." It seems, then, that these areas might be key for any new starter in the UK, where trends tend to follow but lag behind the US. However, statistics for the UK are rather less comprehensive and up to date, but they show a similarly dramatic increase in internet-based commerce. According to the UK Government's Office of National Statistics (ONS), the value of retail web transactions in 2003 was £39.5bn – more than double the 2002 figure of £19bn. According to those same ONS statistics, the value of internet sales to households, rather than other businesses, rose from £6.4bn to £11.4bn during the same period and £78 of every £100 spent on the internet was used to purchase physical goods. As well as the obvious success of some of the more familiar big businesses – both those specialising in internet sales and those using it as an extension of their high street presence – this boom has also been driven by an increasing number of sole traders and smaller operators cashing in on the readiness of consumers to purchase goods over the web. It is now commonplace for many independent retailers, who five years ago might not have had a computer, to have a website. In fact, many are finding that a large proportion of their sales are coming from leads obtained via the internet. While some might take the form of telephone queries or actual visits, more people are prepared to pay for items over the web. Customers with an aversion to releasing their credit cards to too many people can use PayPal, a convenient and secure mechanism which allows payment to be transferred from buyer to seller. Many such businesses aren't always using their own custom-built websites to market and sell their products to customers. eBay leading the way Sites such as eBay have made it easier for those unwilling or unable to set up their own web presence to trade with customers all over the world and capitalise on this particular boom. For some people, the business guidance and opportunities offered by eBay has inspired them to start trading for the first time – or even buy an existing business. Trading through the site is flexible and cheap, and in common with other internet-based businesses, there is no need to invest in specific premises, although if you are considering selling tangibles you do need to think about storage. Of course, eBay isn't free – you have to pay seller fees, which vary enormously depending on the sort of presence you want. The basic package includes an insertion fee chargeable when your service or product is listed, together with a final value fee payable when a sale is made and based on its value. You will need to pay extra to feature photographs on your site or to add other touches to your advert which could give it extra prominence. eBay now offers the opportunity to open a dedicated 'eBay store'. It even runs a 'university' aimed at educating its business customers in good practice. Using eBay as a 'shop window' can be an excellent strategy for smaller businesses or local retailers looking to expand their reach beyond the local area. A model specialist, for example, who could only previously attract custom from a 50-mile radius, can now sell products to people in different continents. One strategy for the potential business buyer might be to seek an ailing business that could be turned around with the addition of a web presence. Whichever route you take to internet-based success, one thing seems certain: the amount of goods purchased online will continue to overtake more conventional methods.
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