Silver Surfers fuel UK Net growth

1999-11-22

It is generally agreed that surveys should be taken with a pinch of salt, particularly when commissioned by organisations standing to gain from the results. As results from three surveys appear on the same day, it is interesting to compare the findings.

First off, High Street banker Barclays commissioned a survey from NOP, which concluded that 41% of people surveyed were willing to switch to Internet banking within a year. It also noted that 36% of over-65s said they would like to bank online.

Second, a survey by Continental Research found that despite 11.1 million people use the Internet regularly (once a month or more), only 1% of all retail purchases were being made over the Web. It also found that average and lower-income families were being left out.

Third, a Which?Online report concluded that more than a million people over the age of 55 are regularly using the internet, primarily as an information source but also to chat.

Of course these are selected highlights of summaries of the surveys, however it has to be said that the different results bear each other out. Particular interest has been garnered by the “Silver Surfer” category. To date, it seems that insufficient attention has been paid to the group of people with more time, and maybe more wisdom, on their hands. Here is proof if any were necessary, that the Internet is more than a technology for the information-hungry whizz kids of our time.

For commercial organisations such as banks and retailers, the raision d’être of the Internet is to make money. While the current reality is that 99% of consumer cash is still being bagged at traditional outlets, the potential exists for a substantial percentage to be transferred to Internet-based transactions. Buoyed by the proof that the Web exists for more than just the propeller-heads, companies are trying every trick in the book (and plenty of new ones) in their attempts to garner a better ion of this market. This is currently geared around Web sites: fresh from another round of high street branch closures, for example, Barclays has announced new features to its online banking service. Sainsbury’s, the beleaguered supermarket chain, has also stated its wish to “launch, develop and own the best portals” in the food, drink, home and garden categories of Internet shopping.

The fact remains that nobody really knows what will trigger the consumer majority to start online shopping on masse. An exponential curve is assumed, but this will not be without significant effort on the part of the commercial organisations to make it so. It is unlikely, for example, that the PC-based Web site is the epitome of what can be done with the Internet. Bandwidth is still a problem which is likely to limit mass market adoption for another couple of years at least. Finally, the vision of most organisations remains sadly limited – Barclays’ list of online banking features falls well short of the blueprint for online banking described by Patricia Seybold in her book “Customers.com”.

Overall we have a way to go yet. Initial excitement and take-up by the hard core will undoubtedly give way to a wider adoption, but both technology and functionality need to improve substantially before this will happen.

One last word about “average and lower-income families.” Various initiatives have been announced, such as Gordon Brown’s PC rental scheme, but they all ignore one significant fact. The Internet is as much about reducing costs as it is about increasing profits. Central government will, sooner or later, work out how much it could save by providing Internet access to all. If this is coupled with the ongoing cost reductions in equipment and connections, then those on lower incomes should be able to take their place in the early majority, when it comes.

(First published 22 November 1999)