Home Shopping

1. Introduction

Home Shopping generally refers to the electronic retailing / home shopping channels industry. Home shopping allows consumers to shop for goods online. Some of these industries are billion dollar companies such as HSN, QVC, eBay, and Amazon.com. Home shopping can be done in the privacy of their own home, as compared to traditional shopping, which requires you to visit brick and mortar stores and big shopping malls

The rates of E-Commerce and E-business in this Home Shopping industry are phenomenal. People purchasing goods online shopping grew strongly amongst Australian consumers with a 66 percent increase in the number of people buying online in the year to November 2000, according to a report released today by the Australian Bureau of Statistics(ABS).(MediaRelease,2001,ABS)

More than 1.3 million Australian adults purchased or ordered goods and services over the internet. This was a substantial increase from the 803,000 adults that did likewise in the 12 month period to November 1999. This is particularly true of the Internet, where the number of Australians who use this technology to shop, pay bills, access services or simply surf continues to rise.

Overall, half of the adults in Australia, or 6.9 million adults, accessed the Internet during the twelve months to November 2000. This compares to 1999 levels when 6.0 million adults, (44 percent of the total) accessed the Internet. More Australian adults now access the Internet at home than at any other place. Almost one third (32 percent) accessed the Internet at home, while a quarter (25 percent) accessed from work and a similar number (24 percent) accessed the Internet at sites other than home or work. In contrast, the rates for the equivalent period in 1999 were 21 percent at home, 21 percent at work and 25 percent at sites other than home or work. The growth in home Internet use is reflected in the increase of the number of households with home Internet access. By November 2000, 2.7 million (37 percent) Australian households had home Internet access, up from 1.7 million (25 percent) in November 1999. Expectations are that every second household will have home Internet access before the end of 2001.

http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/8147.0Media%20Release1Nov%202000?opendocument&tabname=Summary&prodno=8147.0&issue=Nov%202000&num=&view=

The industry that this report explains is the home shopping industry. Home Shopping can be broadly categorized since the social profile of those who use different channels is different and therefore concentrating on the different internet options results ina distorted picture. Some of these options are catalogue shopping, direct retailing, Internet shopping, TV shopping and the emerging intelligent household items. In this report the main focus is on the channel where people shop for groceries and household items online, because there are a number of different ways in which people can purchase goods from home, most of which are forecast to increase in the future.

Research Paper 2

The Business model predominantly used in the Home shopping industry is the B2C model where the major trade and business is from the customers who shop for products online. The E-Commerce model used in this industry is a Store front. Since this report concentrates on business’s which have a physical presence and an online presence. The store front business model closely relates to the home shopping industry A website that offers products for sale is the electronic version of a catalog. These virtual storefronts are built to describe the offering with pictures and words, offer promotions, provide a shopping cart, and complete the purchase transaction. Once the product is purchased, the cyber enterprise arranges for product fulfillment including shipping and handling. The fulfillment is sometimes completed by the website enterprise or directly from the manufacturer in a drop shipping arrangement (Samuelson.R, n.d)

http://www.frugalmarketing.com/dtb/5webincomemodels.shtml

According to a Reuters Business Briefing quoted by Morris (2000):

“The likely truth is that the future is going to be dominated by neither

Internet shopping nor a borne-again resurgence of high streets and shopping

malls. It will, rather, be a sensible, genuinely progressive amalgam of on-line

and high street businesses - what’s already being called clicks and mortar”.

2. Rationale for adoption of e-Commerce

As discussed earlier the Home shopping industry is vast and have different platforms for . Having an online presence helps the customers have a look at the different rpoducts that are available for them

Reduuce costs/increase profit, improve relationship improve communication with customers, keep up with competetors, competetivce pressure customers demands improve speed of access to customers, increase turnover supplier demands increase range of products improve reliability keep up with progress

Estimates of all forms of home shopping (Research paper 2)

Data collected by the Office for National Statistics (2003) suggests that home

shopping sales (defined as �mail order’ and �other non store retail’) have constituted

about 4% of total retail sales for the last 10 years, and are only just starting to become

more significant. There have been some concerns about how accurately the ONS data

reflect reality, particularly the newer forms of retailing such as Internet and TV

shopping. Given that most home shopping is still dominated by catalogue sales, these

figures provide some indication of current trends. Specifically, for example, Mintel

(2003) estimates that mail order still constitutes 70% of home shopping sales, direct

selling makes up 10%, whilst e-commerce (including Internet and TV sales) and other

forms of home shopping make up the remaining 20%. However, there has been very

rapid growth in Internet and TV retailing, compared to other home shopping sectors.

For example, Mintel (2003)