Online Food Shopping: Consumer perception and retailers market approach, contrasting the markets UK and Germany

Abstract

The research’s aim was to contrast the retailers’ market approach and consumer perception of online food shopping in the markets Germany and UK.

The first part of the research project was the review of existing literature to build up knowledge about the history and definition of the Internet and to give a market overview of Germany and the UK. The next areas investigated within the literature review were consumers’ online shopping behaviour and the food retail market. The last part was concerned with specific companies from both countries and their market approach.

Research questions developed in the literature review were concerned with the food shopping behaviour and the perception of online food shopping. Additional questions were if payment security has an influence on online shopping and what other market sectors are of interest.

The first part of the survey collecting quantitative data was carried out within a sample of 100 food shoppers from the UK and 100 from Germany. Questionnaires were distributed using the snowball sampling method - a method where each respondent passes the questionnaire to a number of further contacts. Interviews built the second survey part where two participants from each country were questioned in-depth about their food shopping behaviour and perceptions. The interviews backed findings from the questionnaire survey and gave further information.

Quantitative data was gained and analysed by using the program SPSS. SPSS is a tool that provides the possibility to run statistical correlations between variables and provides graphical outputs to illustrate the findings.

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The findings show great differences in consumer perception and retailers’ market approach between Germany and the UK.

While in the UK online food shopping is popular with consumers and some retailers found a way of establishing themselves in this market, German companies do not offer the service nationwide and consumers seem to have limited interest. Main reasons identified in the research lie in the differences within the economical markets and culture of the countries.

The outlook in the future shows an ongoing increase in online food shopping in the UK but less activities in Germany.

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Acknowledgements

The final step to complete a Masters degree is the Dissertation. Writing a Dissertation is a time consuming and demanding process which I would not have been able to accomplish without the support and help of several people whom I want to thank here.

My first thanks belong to my parents who supported me not only financially but also with a never ending patience on my educational way. Starting with 13 long years of school in Germany they supported a further 5 years of under and postgraduate studies. I hope the future outcome lives up to their expectations.

For all the help over the last year I would like to thank my partner Chris who has shown amazing strength throughout very difficult times. I look very much forward to a hopefully healthy and less stressful future together.

My supervisor Mr. James Knight was always willing to give me immediate response to any questions regarding my work. The fact that he is based in London was not interfering with his role as supervisor at Bournemouth University. He supported the research project with insightful knowledge and dedicated large amounts of his time towards it. Therefore I would like to thank him very much.

The companies Blue Level and InfraNet-Dynamics sponsored the research with the set up and hosting of the online survey. All support in this area was very professional and the dedicated time is gratefully accepted.

Special thanks go to all the survey respondents whom I can not thank personally due to the anonymous nature of the research. The time and thoughts were much appreciated and without their help this research would not have been successful.

Finally my thanks go to all the new friends I met within the last year at Bournemouth University. Special thoughts go to Hannah, Clare, Jenni and Jouni with whom it was mostly good fun to live with, Lara & Mike which are a great couple and Rita who is a lovely girl. I hope to be able to stay in contact with all these great friends in the future.

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Table of Contents

  Abstract  i

  Acknowledgements  iii

Table of  Contents  iv

Tables vi   

  Charts  vii

1  Introduction  1

1.1  Background  1

1.2  Topic choice and justification  3

1.3  Research aim and objectives  3

1.4  Limitations of the research  4

1.5  Report outline  4

2  Literature Review  6

2.1  General definition and historic overview of the Internet  6

2.2  General definition of electronic commerce  9

2.3  Market overview Germany and UK  10

2.4  Consumer’s online shopping behaviour  12

2.4.1  Online shopping population  12

2.4.2  Increasing online shopping  13

2.4.3  Reasons for online shopping  15

2.4.4  Security concerns of online payments  16

2.5  Overview food retail market  17

2.5.1  Market approaches, business models  17

2.5.2  Food online shopping  19

2.6  UK and German Companies  20

2.6.1  UK Companies  20

2.6.2  German Companies  25

2.7  Summary of the Literature Review and Research Questions  29

3  Methodology  31

3.1  Research Perspective  31

3.2  Research Approach  32

3.2.1  Reliability  33

3.2.2  Validity  34

3.2  3 Generalisability  34

3.3  Research Design  34

3.3.1  Snowball sampling  35

3.3.2  Purposive Sampling  35

3.4  Research Strategy  36

3.4.1  Survey  36

3.4.2  Interviews  37

3.5  Data collection  38

3.5.1  Survey  39

3.5.2  Interviews  42

3.6  Method of Data Analysis  42

4  Data Analysis  44

4.1  What population is interested in online food shopping?  46

4.2  How is the food shopping behaviour in general?  52

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4.3  Perception of online food shopping?  60

4.4  Do payment concerns effect online shopping?  67

4.5  Do supermarkets do good advertising?  68

4.6  What are the implications for the future?  70

4.7  What other sectors are of interest?  71

4.8  Summary Data Analysis  74

5  Conclusions and Recommendations  75

5.1  General definition and a historic overview of the Internet  75

5.2  General knowledge about the German and UK market  76

5.3  Different market approaches in the countries  76

5.4  Consumer food shopping and online shopping behaviour  77

5.4.1  How is the food shopping behaviour in general?  77

5.4.2  What population is interested in online food shopping?  77

5.4.3  Perception of online food shopping?  78

5.4.4  Do payment concerns effect online shopping?  78

5.4.5  What are the implications for the future?  78

5.4.6  What other sectors are of interest?  79

5.5  Outlook in the future  79

5.6  Recommendations for further research  80

7  Bibliography  81

Appendix 1  Questionnaire printout version English  

Appendix 2  Questionnaire online version English  

Appendix 3  Interview Notes: Interview  1

Appendix 4  Interview Notes: Interview  2

Appendix 5  Interview Notes: Interview  3

Appendix 6  Interview Notes: Interview  4

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  Tables  

Table 1  : Country Frequency  44

Table 2  : Country/Gender Frequency  46

Table 3  : Country/Age Frequency  47

Table 4  : Country/Occupation Frequency  48

Table 5  : Country/Hours Frequency  49

Table 6  : Country/People Frequency  50

Table 7  : Country/Internet Con. Frequency  51

Table 8  : Country/Supermarket Frequency  52

Table 9  : Country/Transport Frequency  53

Table 10  : Country/Time to S. Frequency  54

Table 11  : Country/Shopping time Frequency  55

Table 12  : Country/ordered Food Frequency  56

Table 13  : Country/Use Frequency  58

Table 14  : Country/Start OS Frequency  59

Table 15  : Country/Easiness Frequency  60

Table 16  : Country/Delivery Frequency  61

Table 17  : Country/Freshness Frequency  63

Table 18  : Country/Completeness Frequency  64

Table 19  : Country/Reason Frequency  65

Table 20  : Country/Security Frequency  67

Table 21  : Country/Provide OS Frequency  68

Table 22  : Country/Homepage Frequency  69

Table 23  : Country/Future Frequency  70

Table 24  : Country/Clothing Frequency  71

Table 25  : Country/Books, CD Frequency  72

Table 26  : Country/Furniture Frequency  72

Table 27  : Country/Holiday Frequency  73

Table 28  : Country/Information Frequency  73

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  Charts  

  Chart 1 : Searches carried out in Oct. 2003 in the UK  14

  Chart 2 : Country/Gender  46

  Chart 3 : Country/Age  47

  Chart 4 : Country/Occupation  48

  Chart 5 : Country/Hours  49

  Chart 6 : Country/People  50

  Chart 7 : Country/Internet Connection  51

  Chart 8 : Country/Transport  53

  Chart 9 : Country/Time to S  54

  Chart 10 : Country/Shopping time  55

  Chart 11 : Country/Ordered Food  56

  Chart 12 : Online shopping/Occupation  57

  Chart 13 : Online shopping/Age  57

  Chart 14 : Country/Use  58

  Chart 15 : Country/Start OS  59

  Chart 16 : Country/Easiness  61

  Chart 17 : Country/Delivery  62

  Chart 18 : Country/Freshness  63

  Chart 19 : Country/Delivery  64

  Chart 20 : Country/Reason  66

  Chart 21 : Country/Security  67

  Chart 22 : Country/Provide OS  68

  Chart 23 : Country/Homepage  69

  Chart 24 : Country/Future  70

  Chart 25 : Country/Clothing  71

  Chart 26 : Country/Books, CD  72

  Chart 27 : Country/Furniture  72

  Chart 28 : Country/Holiday  73

  Chart 29 : Country/Information  73

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1 Introduction

1.1 Background

With the entrance into the new millennium we finally arrived in the information age. Both in the home and workplace, we are surrounded by an ever changing environment, full of new technologies. These technology based systems and devices are marketed at helping to improve our efficiency and enabling us to do traditional tasks in new and innovative ways. This further development in technology is now supporting companies and individuals to cope with day to day business, and for that matter to improve life style.

One of the biggest steps in this technology innovation and movement towards the information age was the development of the Internet. Since the 1990’s the importance of the Internet for the broader public is continuing to grow. The development of the Internet started in 1968 with the aim to create a communication tool for military purposes (Leiner et al, no date). Some 25 years later the Internet was developed further and open standards were published. Companies discovered the advantages of the Net as a commercial tool. Nowadays it is common for businesses to place advertising on the Internet, contact consumers via email and have an online sales and ordering systems. Firms which do not adopt their strategies to this new market approaches are in danger to be overtaken by more innovative competitors.

The most famous person in this context is Sir Tim Berners-Lee who is known as the inventor of the Internet as we use it today. Sir Tim Berners-Lee was made a ‘Knight Commander in Order of the British Empire’ by Queen Elisabeth in early 2004 for his “services to the global development of the Internet” (W3C, 2003). Berners-Lee himself is amazed by the effects of the Internet. He told the British Broadcasting Company (BBC) (BBC, Web inventor…, 2003) that “he never expected his invention would lead to such an accolade”, he saw it as “just another program” at that time. How wrong he was with the underestimation of his invention is shown by today’s massive internet adoption rate throughout the world.

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The Internet’s initial public adoption was primarily taken up by education institutes. This has now broadened significantly. Students now get lessons at school how to handle computers and today there are companies which offer their products and services over the Internet as their only route to market. This leads us to accept the Internet as a mature and proven environment for recreation, lifestyle and commercial purposes.

On one side, there is the advantage of technology and on the other, the changing lifestyle we all lead in this technology era. Since living in a technology driven world, people in the western countries have become used to take advantage of the services and devices which enable them to fulfil their duties faster and to enjoy more spare time. Individuals attempt to work hard and earn reasonable amounts of money which they, in turn, spend to increase their available spare time, e.g. cleaners, and to use this newly created time use for personal benefit, e.g. gym or wellness programmes.

The present research is concerned with finding out how food retailers are dealing with the trend to use the Internet as a commercial tool to reach customers. Food retailing is an industry with a well established traditional market approach. With increasing usage of the Internet in other industries, some key players in the food retail market have decided to change their approach and to provide so called “Online Shopping”.

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1.2 Topic choice and justification

The idea for the research topic was developed due to experiences of different consumer behaviour in the two countries Germany and the UK. The question why the UK food retailers have a different market approach to German ones and if this is conforms to the consumer perception could not been answered by existing academic studies.

The report outcome gives an overview of the major differences between the two markets UK and Germany and provides suggestions why these differences may occur.

The findings of the research will give companies in Germany and the UK an overview if they are on track with their market approach or if they should rethink their strategies.

1.3 Research aim and objectives

Aim

The research is aiming to find out what the differences in the retailer’s market approaches between the UK and Germany are and if the approaches conform to the actual consumer perception between these two different markets.

Objectives

The first objective of the report is to establish a general definition and a historic overview of the internet and electronic commerce. This is followed by an investigation about structure and development of the German and UK market in general. The next objective is to understand the consumer behaviour concerning online shopping followed by food shopping perceptions. To find out about different market approaches of food retailers in Germany and the UK is the next objective. At least this research will compare the online food shopping possibilities with the consumer perceptions in both countries and estamlish if they are in line.

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1.4 Limitations of the research

This research aims to build general knowledge about food retail markets in Germany and the UK related to online shopping. The study investigates the consumer perception of food shopping with the focus to compare what consumers want and what supermarkets offer. The main limitation in this case is based in the sample size and structure. The information regarding consumer perception of online food shopping is based on a survey undertaken in Germany and the UK and including about 100 people in each country. The findings are relevant for this sample but it is assumed that they are applicable for a more general picture. Nevertheless there may be differences in findings if perceptions of another sample are taken.

1.5 Report outline

The structure of this report is divided into five main sections.

The given introduction has built up the background of the research as well as the reasons why this research is of general interest. It explained the aim and objectives of the study but also its limitations.

The introduction is followed by the second chapter, the critical literature review. The literature review is exploring which relevant body of knowledge already exists. This will lead to a picture about general consumer behaviour and food retailers market approaches. The literature review ends with a summary about the existing body of knowledge and with further research questions in areas which are not covered by existing literature.

The third section is about the methodology of the research project which means it explains in depth which approach the research is taking, the way in which the research is designed and the way data is collected. Also the issues reliability and validity are addressed in this chapter.

The fourth chapter is concerned with the data analysis where the gathered data is analysed and findings are explained. The findings are compared with the knowledge gained from the literature review and build into the general picture.

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The last section is built by the conclusions drawn by the research findings. Here it is viewed if the findings meet the aim and objectives of the research project. Further perspectives for the future and recommendations for further research are given in this chapter.

The following literature review is exploring existing literature to see which topic related findings are already established. The literature review is viewing books, journals, newspapers and internet articles.

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2 Literature Review

The structure of the literature review is based on the objectives of the project and is establishing the general definition and a historic overview of the internet and electronic commerce. To give better understanding of the situation in both countries and to gain knowledge about possible reasons for differences between consumer behaviour the general market situations of both countries are investigated. The literature review is also focusing on the market approach of different food retailers and the consumer’s shopping behaviour in the UK and Germany.

The sources used in this literature review are related to the Internet and ecommerce. These two main topics are very fast changing which means information get old in a relatively short period of time. This choice of topic requires a literature review viewing mainly recent findings, statements and opinions. Due to this the present review is viewing many Internet sources and recent articles rather than books.

2.1 General definition and historic overview of the Internet

There are several books and articles existing about why the internet was built and how the World Wide Web (www) developed. Most of them are written for computer scientists with very technical explanations. This first part of the literature review is aimed to collect information which is understandable for ‘normal’ computer and internet users.

Nearly all statements about the history of the internet start with the emergence of a project called ARPANET (Advanced Research Projects Agency Network). Kristula (no date) stated that the idea of ARPANET was established by the US Department of Defence to rebuild the “US lead in science and technology applicable to the military” after the USSR launched the first earth satellite, Sputnick. Ruthfield (no date) supposed that in 1964, in the Cold war, the US military was concerned that their communication could be affected by an attack. This fear was caused due to the fact that all communication systems were centralised and could be a target for enemies. Ruthfield states further that the ARPA (Advanced Research Project Agency) as a part of the Department of Defence was responsible for the funding of research projects

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witch were concerned with technological or military problems. In this case they “became interested in developing a way for computers to communicate with each other”.

The paper ‘A brief history of the Internet’ was written by Leiner, Cerf, Clark, Kahn, Kleinrock, Lunch, Postes, Roberts and Wolff, all people who where actively involved in the development of today’s Internet and have insight knowledge about the procedures. Leiner et al (no date) reports how different research groups started to research in the problem area. They “all proceeded in parallel without any of the researchers knowing about the other work”. All groups came to the conclusion that the idea of sending information form one computer to another is only possible if the information is send by so called packet switching.

Kristula (no date) explains that “packet switching is the breaking down of data into datagrams of packets that are labelled to indicate the origin and the destination of the information and the forwarding of these packets form one computer to another computer until the information arrives at its final destination computer.” Cerf (no date) cites that the act of different computers communicating with each other is called the “Internetting project” and the final result of the research was the “Internet”.

The next big step in the ARPANET project was the connection of four nodes. Leiner (no date) cited that the University of Utha, UC Santa Barbara, Stanford Research Institute and the Network Measurement Center were connected in 1969. He suggests that this event in 1969 builds the start of the Internet.

There is no fixed definition for the word Internet existing. Different people and institutions use different definitions but all describe the same network. Alexandrou (2003) defined the Internet as “a worldwide system of computer networks - a network of networks in which users at any one computer can, if they have permission, get information of any other computer.”

The Hyperdictionary (2004) defines the Internet as “a computer network consisting of a worldwide network of computer networks that use the TCP/IP network protocols to facilitate data transmission and exchange”.

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Kristula (no date) states as the next major event the invention of the first e-mail program which was in 1972. He also cited that in 1973 the invention of the TCP/IP (Transmission Control Protocol/Internet Protocol) as the next important step.

Leiner et al (no date) identifies that the TCP/IP was developed to support the idea of an open-architecture network environment. An open architecture made it possible so that other networks can connect themselves with the Internet and communicate with each other.

Rutherfield (no date) argues that the idea behind the new protocols was to enable the Internet to deal with more users at a time. He contrasts the increasing numbers of hosts (connected terminals) before and after invention of TCP/IP. In the years from 1969 till 1977 only 107 hosts were added to ARPANET while in 1994 over one million hosts where added to the Internet.

Kristula stated that in 1992 one of the most important events took part, the development of the World Wide Web (WWW) released by CERN.

CERN’s homepage (CERN, 2004) states that CERN is the ‘European Organisation for Nuclear Research’. They state further that the WWW was invented by Tim Barners-Lee who was employed by CERN. His project was to invent an Internet protocol which was easy to use for scientists working in different universities and institutes. The tool developed by Barnes-Lee is the so called Hypertext Transfer Protocol (HTTP) which is still in use.

Alexandru (2003) defined the World Wide Web as “all the resources and users on the Internet that are using the Hypertext Transfer Protocol (HTTP)”. The inventor of the WWW, Tim Barnes-Lee, is nowadays chairman at the World Wide Web Consortium (W3C). The W3C was established in 1994 with the target to “lead the World Wide Web to its full potential” (no author, homepage W3C, 2003).

The British Broadcasting Company (BBC, Web Inventor …., 2003) called Sir Tim Berners-Lee the “Father of the Web” when he finally was awarded the title Knight

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Commander of the Order of the British Empire. The awarding ceremony took place in early 2004 and was held by Queen Elisabeth.

The World Wide Web Consortium which director Sir Berners-Lee is states that he sees his knighthood as an award for the whole Internet community including developers and inventors whose work was needed to create the Internet (W3C, 2003).

2.2 General definition of electronic commerce

Alexandru (2003) defined electronic commerce as “the buying and selling of goods and services on the Internet, especially in the World Wide Web.” He also states that the term electronic business (e-business) is often used as a synonym. The authors of the web-design-uk Internet page (2003) agree that ecommerce means selling goods on the Internet, using web pages.

Authors of internet.about.com (2004) divide ecommerce into business to business (B2B) and business to customer (B2C). They argue that in B2C ecommerce most important business steps can be provided online or supported by the Internet. These steps are promotion, ordering, delivery and after sales support. They argue that expenditures for promotion on the Internet will increase enormously due to consumers which start to search for product information online. Common promotion tools are banners, pop up windows and emails. The ordering process over the Internet is one of the main features of the B2C commerce according to internet.about. Placing orders is easy and convenient for users because it also involves the payment online. Product delivery is for digital products only. The after sales support includes search engines, emails support and consumer groups.

The existing literature about definition and history of the Internet and electronic commerce is complete and no further research is needed in this area. The next section is giving an overview about Germany and UK. This is important to understand the stages the markets are in at the moment.

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2.3 Market overview Germany and UK

The two markets UK and Germany are in different stages of market development. Germany is in a depression and the UK is in a stage of stable growth in most areas. The situation a country is in has a great influence on consumer behaviour; therefore this literature review discovered the present market situation in both countries and gives an overview over the technology adoption in each country.

The World Factbook (2004) identifies that the United Kingdom of Great Britain and Northern Ireland (UK) has a total area of 224,820 sq km and a population, estimated in July 2003, of 60,094,648 people. It is stated that services make up the largest part of the UK’s economy with 74%. The major areas are banking, business services and insurance. The World Factbook identifies that the UK economy is one of the strongest in Europe with low interest rates, low inflation and a low unemployment rate. This economical background gives UK consumers a feeling of security and large buying power.

The Federal Republic of Germany (Germany) has a total area of 356,021 sq km and a population of 82,390,326 people (The World Factbook, 2004). With this numbers Germany is the larges economy in Europe but with a weak performance over the last decade. The World Factbook argues that the integration of eastern Germany is a “costly long-term problem”. With high unemployment and slow growth Germany’s deficit has now risen above the EU’s 3% debt limit (The World Factbook, 2004).

The strongest difference between the two countries affecting consumers is the unemployment rate. The BBC (BBC, Jobless…, 2004) stated recently that the UK unemployment rate is at 4.9% of the workforce. This number is the lowest in the last 20 years. The BBC also argues that the number of people claiming unemployed benefits is the smallest in the last 30 years. With that and an increase in average earnings of 3.4% the BBC suggested that the market situation provides a “healthy outlook” (BBC, Jobless…, 2004).

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The situation in Germany is different. As stated by the Mittel deutscher Rundfunk (MDR) a German public broadcasting station the rate of unemployment rose again at the end of 2003 up to 10.5% of the workforce (MDR, 2004).

The BBC (BBC, Jobless…, 2004) also argues that the German economy is still fighting with the affects of the fall of the German Wall 14 years ago. The BBC stated further that major problems occur in eastern Germany where the unemployment rate is double than in the west.

As reviled at the homepage of the UK parliament (2004) the amount of part-time work in the UK is much higher than in Germany with Figures of 25.3% compared to 17.6. The UK lie much over the European average in part-time work according to this figures.

T-online (2004) an international Internet provider argued that the German economy will become more successful in 2004 but that slight economical improvement will take a long time to be seen in consumer behaviour. T-online states that German consumers are alarmed by the economy and that the spending behaviour is deeply affected.

The CyberAtlas (CyberAtlas, 2004) offers latest statistics on Internet users world wide. CyberAtlas uses where available Nielsen//Net Rankings to provide not only figures for Internet Users but also for numbers of active users. Active users are people which go online in a given month and not all users with Internet assess. For Germany CyberAtlas stated 44.13 million Internet users and 27.97 million active users. For the UK there are 34.3 million users registered and 21.3 million users are called active (CyberAtlas, 2004).

Greenspan (Western…, 2003) argues based on findings from Jupiter Research that the number of broadband connections in Europe will overtake the US figure. He identifies that -based on May 2003 figures- the Internet adoption rate within Europe differs dramatically. The UK presents the highest number of internet users in percent of the population with a rate of 57%. Germany with a bigger population but in relation fewer internet users had an adoption rate of 39% by May 2003 according to Greenspan.

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The ebusiness Forum (2003) ranked countries by their readiness for ecommerce. The UK got into rank 3 with a government announcement to become the “most competitive broadband market in the G7 by 2005” (ebusiness Forum, 2003). The UK also has a minister for e-commerce and the goal is to have all government services available online by 2005. This development is supported by a change of the broadband pricing strategy by the UK’s main telecommunications supplier British Telecommunication Plc (BT) who reduced prices significantly.

Germany has ranked 13 out of 60 countries compared in their readiness for ebusiness stated by the ebusiness Forum (2003). According to Meta Group (cited in ebusiness Forum, 2003) this is due to the fact that German companies reduced their Internet budgets in 2002 after the slow down of the Internet boom. The German government is supporting ebusiness as well by planning to make all services online by 2005.

The reviewed literature builds a picture about the market conditions in Germany and the UK. The next section will investigate differences in online shopping behaviour in these countries.

2.4 Consumer’s online shopping behaviour

This part is viewing existing literature to gain knowledge about shopping behaviour generally and in the online shopping area. The shopping behaviour changes gradually with changes in peoples lifestyles.

2.4.1 Online shopping population

The Internet company Webcheck (2003) describes a study undertaken in 2001 where it was found out that people who are self employed and between 25 and 34 build the group which is most likely to buy online.

Greenspan (Gains…, 2003) on the other hand refers to a research carried out by a German research company the GfK Group. They found out that the majority of online shoppers is male and between 30 and 39 years old.

The retail consultancy Verdict (cited by IMRG, Women…, 2004) agrees that men are the main UK online shoppers with 53.7% but that UK women spent more money then men in

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2003. They predict that the balance between UK male and female Internet users will shift in the future and that men won’t be the majority on the Net any more. The BBC (Women out.., 2003) had as one of its news headline “women outspending men on internet” to introduce the finding that women increased their Internet spending by 71.4% in 2003. The BBC argues that the change in women’s attitude will be the major driver for online sales increases. Another group of interest for online business marketers are the over 55 year olds. This group, not gender divided, has the highest online spending amount per person. The BBC supposes that this is due to a large disposable income and the fact that people see surfing the web as a new hobby to find good deals on the Internet.

2.4.2 Increasing online shopping

Rush (2004) argues that with an increasing knowledge and comfort to use Internet functions such as search engines and email programmes the consumers willingness of using ebusiness will increase rapidly in the next five years. Rush stresses that businesses should focus their efforts on the new users which try online business for the first time. After targeting them and having first business contact with them she recommends retention marketing to keep customers.

Rush points at research findings gained by the research company Jupiter. These findings divide industries into three categories of growth within the next five years: Plateau, Steady and Steep. Companies in the Plateau category are on a high online sales level already and will experience a growth rate of lower than 10% per year. This category includes the book, PC and software industries. Companies in the category Steep will have online sales that are predicted to rise over 30% annually. Industries in this sector are home improvement, the food industry and over the counter drugs. The last category consists of industries which are selling high volumes on the Net like the clothing and electronics industry.

An analyst at the Jupiter research agency, Freeman Evans (cited by Greenspan, Ecommerce…, 2004) states that 1.9% of all retail sales were done online in the last quarter of 2003. She argues that this figure will increase up to 5% in 2008. Another increasing role of the Internet is the information function. Freeman Evans identifies that offline

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