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Page last updated at 16:56 GMT, Friday, 27 February 2009

Online shops look to prosper

Click looks at the success online shopping as websites look to make us spend more and keep our money safe.

By LJ Rich
Click

The credit crunch might be bad news for high street stores who see fewer people step through their doors but it is proving to be good news for web retailers.

Many hope their green credentials and more secure payment systems will encourage more customers to take their mouse shopping rather than their car.

Chris Russell, Director of eDigital Research said: "Consumers are spending more online, and this surge in traffic means that e-retailers have a massive opportunity to capitalise on the increased attention they are experiencing.

We actually have a lower carbon footprint per pound of sales than walking to a supermarket yourself
Jason Gissing, founder of Ocado

"If they don't, then they will be missing out on a chance to build customer loyalty and repeat business, something no organisation wants to do in economic times such as these."

Retailers are already beginning to plan stock and quantity levels for next Christmas, suggests research by eDigital. In 2008, 60% of people turned to the web when sourcing presents.

Pick and mix

Jason Gissing, founder of Ocado which works with supermarket Waitrose, said he believed the switch to online shopping would continue.

Boxes on a conveyor belt
Huge warehouses are needed to store goods for our online appetite
"Consumers' understanding and interaction with the internet has changed. I think the services that online retailers offer have improved," he said.

"I often talk about the MySpace generation when I look at friends of mine who have children that are spending their entire times online and texting each other.

When they start working, they're going to embrace the internet in a way that we can only dream of."

In its warehouse Ocado uses eight miles of conveyor belts to move shopping around as orders from shoppers are picked and put together.

To ensure food stays frozen, the shopping basket travels from the top floors, which are cupboard temperature to the bottom floor, where the fridge and freezer food gets added at the last minute before finally being loaded into delivery vans.

Said Mr Gissing: "We actually have a lower carbon footprint per pound of sales than walking to a supermarket yourself, because everything that you see here is in one place.

"We don't have big open chillers and freezers with nasty refrigerants that you get in a big shop, and heating to make customers feel happy as they walk around and shop."

Money market

And it is not just in green issues that online shops want to be seen to be concerned about.

A Pinoptic keypad
Retailers hope better payment security will attract more customers
Online security has been another priority for retailers in their efforts to boost sales.

One possible solution is chip and pin, widely used outside in the real world, that is now starting to be used for web shopping too.

Credit card giants Mastercard and Visa have already launched their online verification tools.

UK-based Pinoptic has developed a slightly different system. Those using it generate a code they enter into an online keypad but, instead of the code being four numbers, it is two numbers and two icons.

Each time the code needs to be entered, the icons will be in a different place on the keypad. This makes it very difficult for keyloggers to figure out an individual code, claims Pinoptic.

SEE ALSO
Online shopping 'defies slowdown'
03 Jun 08 |  Business
Christmas Day web shopping surge
09 Jan 09 |  Business
'Busiest day' for online shopping
08 Dec 08 |  Business

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