It was in the 1990’s that e-commerce first took off, and shopping cart icons started to appear on retailer’s web pages. But then the dot-com bubble burst and sales dropped dramatically. There were just too many companies selling on the net. Now, however, the big retailers are investing heavily in e-commerce and looking to the Internet to open new doors. I asked retail analyst Anita Knapp to explain why. Many retailers are now looking at all kinds of ways to promote and sell their products. It could be through the Internet, a handheld device, or an in-store kiosk. - Sorry Anita, what’s an in-store kiosk? - It’s a computer, in a shop, which allows retailers to show their customers a much larger range of product colours and models than there is room for on the shelves. For example, a shop may have room for only one make of printer. With an in-store kiosk, the retailer can not only show the customer all the different models and colours available, but also where to buy them. Also. if you’re buying a fitted kitchen or bathroom, you can see the finished product in a 3 dimensional, 360-degree perspective. - In what other ways is e-commerce technology making a come back, Anita? - Well, when a consumer walks into a traditional bricks and mortar store, he or she wants to be able to find a product as quickly as possible. When they shop online they want to find them even more quickly. This is where advanced search functions come in handy. The customer enters a precise product description and finds the product in seconds. - Can the retailer benefit directly from this? - Yes, by analysing the shopping habits of visitors to the website, the retailer gets a much better idea of how people are shopping. This means that the retailer can give the consumer what he or she really wants. It’s a kind of digital market research. A lot of consumers use search engines to find products on the web, and retailers need to be displayed in a good position on search engine results. Technology also gives the online shopper the opportunity to follow their product order from start to finish. The customer can check the status of an order at any time, or even chat to the retailer in real time and ask questions about the product. In the last few years we’ve seen a lot of interest in investing in internet technology because it’s such a successful sales channel. It allows companies to influence their consumers and to build brand loyalty. This is one reason why we’re seeing such an increase in investment in this area. A Drawback - On the negative side though Anita, how is e-commerce being affected by e-crime? - Fraud and online theft could potentially damage online trade significantly. A recent survey from Consumer Reports Webwatch claimed that as many as 25% of consumers might stop shopping online, and another 30% said that they were reducing the amount of time they spend shopping online. In fact, 62% of consumers are not willing to give their personal and financial information over the Internet. The good news is that U.S. banking institutions will soon be using a two- factor authentication system in order to improve security of online financial transactions. - Can you explain how this works, Anita? - Yes, this will replace the use of one static password that most of use now, and which can be discovered by hackers relatively easily. Two-factor authentication combines one thing the consumer knows with one thing the consumer physically possesses. There is a security ‘token’ which is on the user’s PC as a plug-in to a browser, and this software-based token authenticates a unique one-time password that would be a second factor in allowing the consumer permission to enter. The passwords are never repeated, so hackers are unable to steal them. The problem with this is the cost, between $10 and $20 per user to install on PCs, laptops and PDAs. Hopefully though, the banks, big credit card companies and big retailers might eventually give away this technology to boost consumer confidence and reduce the amount of money being lost at the moment to online theft. - So the future isn’t all bright and sunny? - No, but despite these reports, online purchases have been growing at double-digit figures and will continue to grow. Bad press and reports of Internet crime are not going to stop the growth of e-commerce. - Anita, Thank you very much indeed. - My pleasure.