Caution is advised over potential of e-commerce

Despite Government claims last week of a ‘digital divide’ between large and small retailers, designers believe consultancies should encourage clients to be realistic about what e-commerce can achieve.

According to a report commissioned by the Department of Trade and Industry, three quarters of retailers are embracing digital technology, with large players like Tesco becoming world leaders in the field. But 56 per cent of micro companies in the convenience store sector, and 23 per cent of retailers overall, have not even considered adopting e-commerce.

Launching the report, e-commerce minister Stephen Timms enthused, ‘E-business technologies offer a wealth of benefits.’ Among those the DTI identifies are improved stock management and a wider range of products than can be held in-store.

But designers involved in website and e-commerce development say retailers of all sizes must be cautious when approaching the Internet. Clients should evaluate costs and not be fooled into thinking the Web is a panacea for business, they suggest.

‘Our advice is that you should look and think long term,’ says Moira Thomson, business development director at Edinburgh-based consultancy Whitespace. ‘Be very honest about what you can afford and be realistic about your expectations of success.’

The report sees high investment costs as a major barrier to entry, particularly for smaller retailers. A simple corporate website – effectively an on-line brochure – can cost as little as £1000. But a site allowing customers to buy on-line – with a secure server and the technology to place orders – costs anywhere between £30 000 and £100 000.

Thomson says retailers should adopt a phased approach to e-commerce so that they don’t become over-committed.

‘Part of our job [as consultancies] is to educate new entrants about [their] approach,’ she says. ‘We have a responsibility as designers not just to think about design, but to make sure it is grounded in their overall strategy.’

Consumers’ need to ‘touch and feel’ a product before purchase is also highlighted as a drag on successful e-commerce, though design can go some way to addressing the ‘pre-shop experience’ with more interactive imaging – such as that demonstrated by the Digit-designed Habitat website (pictured).

But Digit creative director Daljit Singh says digital technology offers the most advantages in dealing with ‘back-office’ issues, like communicating with suppliers.

Singh says the adoption of e-commerce could follow the pattern of the shop bar-code system – Epos or electronic point-ofsale – in spreading from larger to smaller retailers, as the cost of introducing it falls.

The Government’s aim, according to Timms, is to ‘create the right culture throughout the business community so that UK companies of all sizes can seize the competitive advantage [of e-commerce]’.

Given the start-up costs involved, Singh makes the case for Government funding of low-cost systems for small business.

He also suggests that smaller retailers might group together to establish portal sites, or even that design consultancies consider offering their services for free to such companies.

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