Written by James Millar.

In the dawning era of electronic retailing there will be extremely visible changes to the way we shop. Gone will be the megastore, the large supermarket and the cargo warehouse and in their place will be smaller units requiring much less in the way of customer decor. The high street will not disappear, but it will undoubtedly look different, with a much wider variety of smaller specialist premises lining the pavements.

Bookshops, travel agents, DIY and music stores may well disappear off into cyberspace. Banks and building societies may not completely vanish, as some predict, but there will certainly be less of a need for them to be operating out of regular shop-fronts. Clothes shops and food stores are likely to become specialist boutiques no longer selling mere jeans, sweat-shirts, lemonade or tomato ketchup but stocking particular fabrics which need to be seen and felt and particular foods which need to be seen and smelt before purchase.

Away from the main streets, where the property is cheaper and larger and where it's easier to manipulate vehicles, we shall find the stock. Not in customer-styled showrooms, but in cash and carry style warehouses. All the goodies that we have been used to buying from the shelves during the last three decades will be found here, probably referred to within the warehouses by shelf-bin number or bar-code, rather than by catchy consumer name-tags. They will be purchased by the same consumers and used by the same families for the same purposes. But they will be sold and bought entirely differently - by remote shopping, teleshopping, electronic retailing, kiosks, cable tv, satellite box, internet, intranet; there are already a variety of unlikely sounding names for it. The merchandise will be delivered to (or collected by) the purchaser at a pre-arranged time and address.

If this means big changes for the shopper, it means even more of a difference for the suppliers and retailers. Suppliers supplying the new retailers (who, for want of a better collective term and also because it looks très futuristique, I shall call, "e-tailers") will need to customise their operations so that they fit snugly with the e-tailers new demands. Speed and logistical efficiency are paramount to every supplier, but these twin axes will become ever more acute as retailers speed up their own practices by offering their own customers faster, more efficient delivery terms.

It is obvious that e-tailing is different to conventional retailing; one of the main reasons for this is a subtle shift in purchasing responsibilities. Today, the retailer is the king. And nowhere is this better exemplified than down at the multiple grocery store.

Here the customer is at the beck and call of the supermarket whether he likes it or not. He is required to traipse out to the store (be it on the high street or in an out-of-town mall), through rain or shine, plough his way around miles of aisles (all glitteringly laden with goodies he does not really need), find what he is looking for through the melee of competition on the floor and on the shelf, stand meekly in a queue while everyone else gets their shopping checked more quickly, struggle with the little bags that bulky shop shoppers are always offered and finally struggle his way back again to his home carefully avoiding everything in case the eggs break all over the special treats he unintentionally acquired for his kids. This is major league retailer control over the shopper.

What is more, all the mini decisions our shopper makes during the course of his shopping trip (and there will be many hundreds) have all been shaped by the retailer. What time he goes (when is the store open/busy/empty?), what he buys (tactical store lay-out?), what impulse purchases he makes (tactical merchandising?), what he does when what he wants is not on the shelf (tactical stocking?), where the helpful assistant is standing (tactical marketing?), what time there is a shorter queue at the check-out till (tactical staffing?). And if he happens to purchase something which is not what he wanted or broken or short-dated, does he come all the way back again clutching it mournfully while he waits around at the Customer Service desk before bleating out his complaint in front of all the other nice shoppers? Probably only in the minority of cases. What a load of responsibility is heaped onto the shoulders of our harassed shopper.

Not so the e-tailing shopper. In the new era of retailing, the customer is much more the king. Placing his order from the comfort and safety of his own home or office, the new consumer places his order freely and easily down the wire and...more or less waits for the delivery man. He has made his purchasing decisions, he knows the cost, he knows when he is expecting the delivery to be made and by George, he knows that what he is expecting to have delivered is exactly what he ordered. The mini-decisions are now heaped in great scoops onto the shoulders of the e-tailer. For it is now on him that the onus of ensuring constant stock availability, correct order-picking, safe order-packing and timely delivery now falls...and all, of course, for a respectable price. We can see suddenly that the purchasing responsibilities have shifted from the conventional shopper to the new retailer. Or put another way, the customer begins to have markedly heightened shopper control.

This is an important watershed, because it immediately throws up all manner of stock and supplier related consequences. In the conventional shop scenario, our shopper, once he discovers that there are, say, no raspberry flavoured marshmallows left on the shelf (only mandarin flavoured ones) can decide (a) not to buy any flavoured marshmallows at all on this occasion or (b) buy the mandarin flavoured ones on this one-off occasion or (c) go in search of some other suitable alternative which he may not even be able to identify at this moment. In the e-tailing example, the e-tailer, if he wants to maintain his customer, simply must ensure that raspberry flavoured marshmallows are in stock, for the very simple reason that this is what his customer has ordered.

It soon becomes clear how shopping really is a very personal activity. Because, while it may be acceptable occasionally to substitute an item, the e-tailer can never be certain that this will go down well with every customer and he certainly cannot predict what other item the shopper may want instead. Experience shows that a broad policy (be it "we substitute" or "we do not substitute") usually breaks down or becomes fraught with too many exemptions to be of practical use. Woe betide the e-tailer who delivers or, worse, substitutes the wrong product - suddenly it becomes clear why an Englishman's home is his castle, as he booms his strident case down the telephone. This is real shopper power!

We thus discover the main dilemma for the e-tailer which draws a major difference between shopping the old way and the new. Whereas the conventional retailer can often get away with a bad, poor, questionable or at best tactical stocking policy in certain areas and at certain times (because he can usually rely on his customers to find a satisfactory alternative solution to an out-of-stock problem by searching the shelves for themselves), it is almost impossible for an e-tailer to operate in the same way without severely and permanently frustrating his customer base. It does not really matter whether it is beans, jeans or windscreens, both the e-tailer and his customer have a problem if what has been ordered is not available at the time of delivery.

So what does the e-tailer do? Does he offer a speedy service (same-day or within 24 hours) emphasising the convenience and the quick turn around from order to delivery and thereby creating stock availability pressures or does he offer a more leisurely one (within 7, 14 or 28 days) with an express guarantee that goods ordered cannot be out-of-stock. The dilemma is heightened by the fact that consumers will increasingly expect a speedy delivery service and therefore the longer the delivery delay the lesser the service will be perceived to be.

If the e-tailer opts for the latter he may be relied upon to provide the goods but he is at the mercy of his faster competitors. For in the era of increased shopper power, the e-tailers will be judged on the overall package they offer. Convenience (the measure of time and effort saved) will always be high on the list, but it is hotly pursued by a combination of ease of use, knowledgeable staff, reliable delivery scheduling and price.

To survive and flourish, the e-tailer will have to opt for the fast service option. Services which offer a delivery period of "up to 28 days" will simply die out. This means securing relations with fast, efficient and reliable suppliers. Suppliers or a supply system which can turn orders round within a few hours, communicate all shortages and non-availables before the delivery arrives, guarantee error-free deliveries and deliver the goods at a convenient time and in an easily manageable condition. Suppliers who can deal with transport delays, staff shortages, mechanical breakdowns and all the other traditional distribution mishaps. Suppliers who, above all else, exist because they know that they must get the goods ordered to their destination soundly, safely, correctly and on time. In many ways suppliers will need to rethink completely and act as if they are supplying directly to the final consumer.

During the past few years the major retailers and suppliers have been working together to smooth the wrinkles in their own supply-chains, under EDI. However, the remarkable advance in electronic communication systems suddenly allows almost any size of business into the game. The newer breed of electronic communications fill the gap in the communications network that the telephone system never could. E-mail and internet, and to a lesser extent the fax, can permit anyone access to fast, reliable and efficient lines of communication which are ideal for passing backwards and forwards exactly the sort of data and information referred to earlier.

And it is good commercial use of these fast communication lines that will determine who the successful e-tailers and suppliers of the future will be.

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