E-commerce turns up the heat

In 1999, Internet users will be more prone to ask a business for its Web site address than its telephone number, and 25 per cent of all Web surfers will buy something online, according to a London-based electronic commerce group.

These are among some of the predictions from the Interactive Media in Retail Group (IMRG), an e-commerce membership group and consultancy that looked into the future with an aim to forecast what's in store for online vendors and consumers this year.

"People won't ask, 'What's on the Internet?', they will expect everything to be on the Internet," IMRG said in its report. The products most commonly purchased over the Internet will be travel, computers and software, financial services, books, music, clothes, toys, cars and real estate, IMRG said.

And consumers won't be content to sit back and accept the prices listed. Buyers will form "communities" that use their collective power to drive lower-cost deals with merchants, IMRG said. Also, surfers will begin to expect free connectivity from Internet service providers, who will sign cross-marketing deals with online vendors.

However, all is not rosy. Most e-commerce vendors will not turn a profit this year but will instead continue to invest in brand-building and marketing with a longer-term vision in mind, IMRG said. The market will also see a lot of consolidation of online vendors, with several vendors often coming together to sell products in a "corner shop" setup. U.S. retailers will flood into Europe, where the market is just beginning to develop.

If European companies don't begin to wake up to the importance of e-commerce this year, they will suffer for years to come as a consequence, IMRG said. And those companies that do have e-commerce sites in place, but don't have a robust enough technical back-end to support a large amount of orders, will also find themselves sidelined by more nimble and fast-moving players. On the other side of the coin, companies that have great Web sites but don't invest enough in marketing will also miss out on sales.

Another foreboding prediction for Europe is that venture capitalists and investors will continue to "completely fail to adequately fund the online retail industry" this year and that European entrepreneurs will continue to head to the U.S. to launch their businesses.

Among some of IMRG's more controversial predictions are that several major European banks will "disappear" because they have failed to grasp the idea of e-commerce and that online shoppers will secure payments and identify themselves to merchants using a scan of their iris. In addition, IMRG says that "Internet time," where time is measured in a different realm online, will become more prevalent as a means to remove time zones and geographical borders.

And one last prediction? That the creation of home-spun sites will create the first teenage e-commerce millionaires in 1999.

More information on IMRG can be found at http://www.imrg.org/.

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