Zoom enters free net fray

Free internet access will boost e-commerce, Zoom says

Fashion and lifestyle website Zoom plans to offer its users free access to the internet.

It is the first e-commerce website to do so.

The announcement follows a succession of offers from internet service providers, all hoping to corner the market in internet access.

Shoppers will have more time to decide on online purchases

Unlike these ISPs, Zoom does not rely on internet charges for its revenues. Its revenues come from sales and advertising.

Zoom plans to launch the service in the next six weeks.

Free except...

Like most of the deals offered by ISPs, the Zoom offer contains a few charges.

New members will pay a one-off £10 charge for administration costs.

This will be refunded in a £10 clothing voucher for high street stores, in shops such as Top Shop, Racing Green, Dorothy Perkins and Evans.

Users can then surf for free as long as they spend £20 each quarter on the Zoom site.

While the Zoom site predominantly sells clothes, it also sells other consumer goods.

The upside for Zoom of offering free internet access is that it should increase the number of e-commerce transactions completed.

"The cost of browsing before buying has been one of the major barriers to people shopping online," Eva Pascoe, joint managing director, Zoom.co.uk, said.

Steady revenue

Unlike other ISPs that have offered free access, Zoom does not base its revenue streams on internet calls.

The Zoom site earns money from e-commerce transactions as well as advertising and sponsorship.

This makes it less painful for Zoom to offer a free access package.

Earlier on Thursday, Freeserve warned that the unmetered access package it announced this week could halve its revenues.

This is the dilemma many ISPs face. They need to cut internet charges to gain market share but to offset the loss in revenues this entails, they also need to reinvent themselves as e-commerce sites.

"The sites to have offered free access so far have been the ones that do not enjoy high transactional rates... by providing Zoom free internet access, we will see rapid transaction growth in the future," Ms Pascoe said.

Zoom is owned jointly by Arcadia Group and Associated Newspapers. Arcadia owns Top Shop, Top Man, Dorothy Perkins, and Evans among other clothing brands.