Virgin May Undercut High Street Stores With Online Sales
It is rumoured that within the next couple of weeks, Virgin will announce plans to sell videos and CDs, via the internet, for a lower price than its High Street Megastore shops.
According to industry sources, Richard Branson’s VirginNet website will offer CDs and videos for a cheaper price than the stores. A spokesperson for VirginNet would not confirm this, saying that there will be some discounts online, as there are some discounts in the shops. Although she denied that the online prices would undercut the High Street shops, she did confirm that a MegaStore website, with online sales, is due to launch in the US within the next few weeks. A UK version will be rolled out in the summer or autumn.
Some industry observers think that more UK retailers may launch online stores which undercut their High Street shops, in a move to preempt an entirely online brand stealing business. As the presence of the internet grows in UK consumers’ minds, so businesses are beginning to realise that there is a palpable business opportunity awaiting them in e-commerce.
Selling goods and services electronically is certainly an expanding market but still many of the country’s largest firms have yet to develop online transactional services. A survey by Verdict Research (January 1999) found that although 47 of the UK’s top 100 retailers have websites, only 14% of these currently allow transactions. Three-quarters of people are still to have purchased anything through the internet, although this is not necessarily because they are not interested in electronic shopping, according to a recent MORI survey.
One in ten Net users said they have been unable to find the product they were looking for on the internet, and only one in five were satisfied with what they are presently able to buy, according to the MORI survey produced in association with Hewlett Packard. Almost 60% of consumers said that they were surprised that major retailers didn’t offer the option of buying online.
Over half of users felt that the online shopping process needs to be made more attractive and simple if they are to use it. A massive 85% of respondents to the survey said that they would consider buying products or services through the internet.
Flights and holidays and cinema/theatre tickets are currently the most popular items being sold electronically, followed by computer hardware and software. Of the brands covered by the survey, Marks & Spencer was the company customers would most like to buy from (37%), along with book shops WH Smith and Waterstones; the main supermarkets, Sainsburys, Tesco and Safeway, follow. Tellingly, Marks & Spencer has not yet set up any online purchasing facilities, but says it is conducting a feasibility study into this.
Virgin: 0171 479 4400 MORI: 0171 928 5955