BOCA RATON, Fla. -- The age of the Internet will provide retailers with enormous opportunities for creating new avenues of business. But doing so will require breaking out of old ways of thinking about retailing and taking some bold leaps into unexplored territory.
It may also require some patience until more consumers have adequate modem capacity to access the World Wide Web efficiently, said Graham Clark, director of retail and distribution industries at Microsoft Corp., Seattle.
Clark spoke about the Internet at the Interactive Solutions Conference here last month sponsored by SN, which is published by Fairchild Publications, New York. The event, which drew about 90 attendees, was cosponsored by Deloitte & Touche, Hewlett-Packard and Microsoft.
"The key thing about electronic retailing is what it does for our business. It allows us to merchandise products in new ways. It will allow the creation of new formats. New types of retail formats will emerge as a result and new business models," Clark said.
The growth of electronic retailing will change key fundamental aspects of the way business is conducted, including even how products are distributed and who takes ownership of merchandise along the path to the consumer, he said.
Increasingly, it may be that succeeding with electronic retailing on the Internet requires, more than anything else, the ability to think in strikingly new ways about the role of the merchant and the needs and desires of the consumer.
"Those people who experiment and look to break the rules and challenge the existing thinking, about the big bang theory or electronic retailing, will be the people who are likely to rise in the marketplace as successful retailers in the 1990s and beyond," Clark said.
Before the Internet's World Wide Web business potential can be fully exploited, however, consumers' average computer capacity -- especially in terms of modem speed -- will have to increase substantially.
"As of the end of October 1995, there were 44.5 million modems in the marketplace. But over half of those modems are 9,600-baud or below. That means we can take that number of 44.5 million and cut it in half as far as the number of people who can experience the Internet graphically. And that is the only way electronic retailing is going to happen on the Internet," Clark said.
As far as potential sales on the Internet go, Clark said that studies estimate that "anywhere between $300 million and $600 million of business was done on the Internet in 1995. But I have to tell you two-thirds of that was in the area of ticketing systems.
"So in terms of pure electronic retailing, probably less than $100 million in total" sales was conducted over the Internet last year, he said.