E-commerce in 1988

In 1988, the frothiest of the Thatcher years, I was a director of Fitch & Co, one of the co-organisers of the Teleshopping Consortium. That was Britain’s first-ever study into the future of what is now known as e-commerce and e-tailing. This piece, which was a cover story for The Listener, was written before anyone knew much about the Internet.

In Clearwater, Florida, the live TV show compère glances at a computer monitor off-stage. His eulogy for the sparkling rings and bracelets he has in close-up is, the monitor reveals, bringing in sales of $700 a minute. In front of him 1200 telephone operators in soundproof cubicles take the calls from up to three million homes. Multiply that $700-a-minute figure by all the minutes in a day, and America’s Home Shopping Network will rack up sales of hundreds of millions of dollars a year – on this, just one of three TV channels it runs coast-to-coast.

In White Plains, upstate New York, the top executives at Trintex, a 700-strong subsidiary of IBM and Sears Roebuck, are nervous but optimistic. It is about to launch Prodigy, a floppy disk and modem gadget which will allow users of IBM or IBM-compatible machines not just to shop for airline tickets and Polaroid cameras, but also to follow their favourite news, their local weather and – inevitably – the fortunes of their shares. The Prodigy package will sell at $150 for half a year’s usage; thereafter, the whole service will cost but $9.95 a month to rent. Glistening ads, which fill much of the bottom part of every page you view, will underwrite the prices.

These two examples cover the full gamut of buying from the privacy of your own home. Home Shopping Network is based on broadcast, cable and satellite television channels, price-slashing discounts and purchases made on impulse. You never know what will be up for sale next, and you can only get it while it’s on the screen. HSN also provides viewers more with showbiz than genuine interactivity; you can phone in, live, to tell a nationwide audience how you just love that tiara, but apart from the fact that you’ll pay for it to arrive on your doorstep within four days (press 1 to go ahead, 2 for not to), the sense of being connected ends there.

By contrast with HSN, Prodigy caters for considered usage, and wires your PC up to impressive effect too. You can tab across a relatively primitive diagram of that Polaroid camera to have its various features explained before you ask for a brochure – or the item itself – to be delivered. You can peruse every ad in more depth, though each decision to do so will be logged on a distant mainframe computer. Most important, you can key in questions about your waistline to Jane Fonda, or at least to her staff. They’ll get back to you within 72 hours.

Teleshopping practice in the States is worth describing at some length, if only because defining the medium is a fruitless task. Teleshopping is remote, certainly; it is, as we have seen, more or less interactive; it means buying cosmetics, giftware and fashion (Home Shopping), as well as securities, hotel stays and Encyclopaedia Britannica education (Prodigy). But every teleshopping system is different.

Take France. There, one of the early acts of President Mitterand’s regime was to distribute to the populace terminals and keyboards designed as a free, electronic substitute for telephone directories. Known as Minitel, they are rather poky, dark brown things, with distinctly primitive typography and graphics and a ‘navigation’ system of menus only: unlike Prodigy, no sophisticated ‘windows’, reminiscent of the Apple Macintosh, appear on their screens.

More than three million Minitels now figure in homes and businesses as far-flung as France’s overseas territories in the Indian Ocean. Yet though the system boasts no fewer than 400 separate services, only 183 deal in items like antiques, books, compact discs and videos. Food and wine, both delicatessen and supermarket in type, loom large; but the big money-spinner for Minitel is saucy subscriber-to-subscriber communication (‘messageries rose’), conducted anonymously and in real time. From Réunion to Rouen, people ‘shop’ for literary thrills. It isn’t like retailing at all.

In Britain, teleshopping has taken different forms again. Here local councils have teamed up with supermarket chains such as Tesco (Gateshead, Newcastle) and Asda (Tower Hamlets, London) to offer elderly and disabled people teleshopping as a social service: Gateshead, indeed, even has a waiting-list for senior citizens anxious, contrary to ageist myth, to have their own computers. The most recent news, however, is that more than a dozen major UK companies have formed a consortium to map out how teleshopping can and should happen nationwide.

With the exception of Tesco, Littlewoods and Thorn Home Electronics, none is a dyed-in-the-wool retailer. Rather, theirs are names in transport (British Airways, British Rail, Royal Mail Parcels, Transport Development Group), communications and computing (British Telecom, the Cable Authority, Central TV, Digital), and diverse fields such as packaging (Metal Box), finance (Barclays) and brewing (Whitbread). So we are not talking about an immediate migration of Sainsbury’s and Woolworth’s from High Street to living room. But if teleshopping ever does reach national proportions in this country, the interest of sectors as diverse as airlines and banks suggests that it will bring with it more than just a change in shopping and viewing habits.

The change will probably not come much before the next elections, the liberalisation of EEC markets, or the opening of the Channel Tunnel. But, because of the way it promises to transform the role of the home in society, it could have a dynamic as significant as each of these momentous events; and it will undoubtedly have an intimate association with each of them.

In the late 1970s and early 1980s, a series of teleshopping initiatives in Britain went wrong. Entrepreneurs of the ‘wouldn’t it be great if?’ school introduced expensive, primitive equipment to small, unsuspecting audiences and saw their investments vanish within a year or two. They offered groceries that were neither fresh nor profitable, as well as goods and services far too limited in terms of consumer choice. As a result, the hype that often surrounded teleshopping was exposed as just that; even today, many commentators remain sceptical.

The Thatcher years, however, have improved prospects dramatically – and another Tory term can be expected to do the same. First, so much money has shifted out of manufacturing and into retailing that conventional retailers, emboldened by a seemingly unstoppable consumer boom, now face a situation in which markets may soon be saturated and trading space is almost impossible to come by. Second, increasing competition between retailers and manufacturers has made the latter anxious to redress the balance of commercial power in their favour; if they can find a way to out the middle man, they will take it. Third, the deregulation of broadcasting and telecommunications opens up opportunities for reaching consumers in new ways. Finally, the individualism, social atomisation and spread in home ownership of the late 1980s have, together with the ageing of the population, encouraged a pervasive ‘home-centredness’ on the part of the British. It is this fact which, reinforced by yet another Thatcher victory in the polls, may prove decisive in making teleshopping a reality.

Nor can the dimension of Europe and the Channel be excluded. Whatever the impact of Britain’s worsening trade figures, the possibility of British consumers ordering liver sausage, Parmesan and the odd crate of Heineken direct from continental producers – through fibre-optic cable, satellite TV or international telephone lines – is a genuine one. Already, France’s Minitel is hooked up to the USA; and, in non-interactive ventures, American and Italian exporters have arranged vast off-the-screen and off-the-page selling sprees in Japan and other overseas locations.

In teleshopping, it appears, anything may be possible. Already tons of personalised junk mail land on British doormats: backed by Orwellian credit card databases recording where and when we last bought what, this ‘direct marketing’ is but one portent of the commercial power that teleshopping concerns – multinationals, perhaps – may one day wield. Another is what has happened to mail order catalogues, in the era of Bymail and the Next Directory. These glossy numbers suggest that teleshopping will not be a habit confined to computer buffs. Last, there are applications more redolent of social responsibility. France’s Minitel, for example, now features a medical Expert System that will interrogate you on every symptom once you’ve keyed in the magic phrase I HAVE A HEADACHE.

So who will benefit from teleshopping, and in what way? Despite the hedonistic associations of much of the new mail order, to imagine that only the affluent or the youthful will be prepared to learn the discipline would be to prejudge the issue. With Home Shopping Network, for example, suburban women with an average age of 45 are the chief viewers, even though average incomes reach nearly $40,000 a year. No: where teleshopping is really likely to score is among all those pressured for time. It is that constituency at which Prodigy is aimed, and it is much broader than one might think.

For it is not just yuppies who have trouble packing a trip to the shops into a normal week. For both sexes, a lowly sector like manufacturing has seen working hours lengthen since the early 1980s, while the general trend toward part-time work among mothers suggests a similarly intensive, minute-to-minute battle to organise their lives around care for children and the elderly. In a Britain of worsening traffic congestion and – in many places – continuing tensions on the inner-city High Street, the ‘convenience’ aspects of selecting by screen are not to be trifled with.

For those lucky enough to retire in some comfort in the country, on the other hand, there may be time enough to engage in a more leisurely type of teleshopping, based on the connoisseur’s search for the right educational holiday, or the bargain-hunter’s comparison of one luxury piece of fashion against another. Here, rural remoteness may make older people some of the biggest teleshopping spenders.

There will be other benefits, too. You might arrange to be reminded of anniversaries, of shampoo bottles running dry; you could, perhaps, engage in electronic haggling, digital barter and much else besides. Certainly, access to the very latest products and services would be made much faster.

But for all this to happen, demanding British consumers, weaned on the punchy presentation of News at Ten and the charts of Newsnight, will have to have high visual expectations satisfied. Clothes must arrive in the right size, in the colour and condition and at the time you expect them to; but unless they are sold as entertainingly as they are at Britain’s gleaming new department stores, you may never feel the urge to order them up.

In teleshopping, as in the tobacconist’s on the corner, the customer is always right. When Britain’s designers, advertising agencies, television producers and film directors turn their attentions to the new challenges it throws up, overseas teleshopping interests are bound to take note. Then this country may have on its hands a new earner of invisible exports, and one much more lucrative than Jewel in the Crown and Chariots of Fire.