The Internet is Broken

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Free Business Support for IT Retailers & Resellers Workshops | Mentoring | Blog | Opinion | Forum | Research

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Broken?Is The InternetWeb of Intrigue 1: The Internet Is Broken2

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Everything YouBelieveIs WrongWeb of Intrigue 1: The Internet Is Broken3

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Growth isNOTHappeningWeb of Intrigue 1: The Internet Is Broken4

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Growth isSLOWING EARLY and ABRUPTYWeb of Intrigue 1: The Internet Is Broken5

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

The Bubble HasNOT YETBurstWeb of Intrigue 1: The Internet Is Broken6

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Internet growth is NOT materialisingWeb of Intrigue 1: Internet Growth Is Not Materialising7

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

UK Online 2006 - 2013% Population Purchasing on Internet

Web of Intrigue 1: Internet Growth Is Not Materialising8

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

36m Brits Use the Internet Daily35.7million7.4million4.2m1.6m

UK Online 2006 - 2013% UK PopulationWeb of Intrigue 1: Internet Growth Is Not Materialising9

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

What Are They All Doing?

UK Online 2006 - 2013%AgeGroupWeb of Intrigue 1: Internet Growth Is Not Materialising10

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Surely Everyone is Buying Stuff?

UK Online 2006 - 2013%AgeGroupWeb of Intrigue 1: Internet Growth Is Not Materialising11

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Web of Intrigue 1: Internet Growth Is Not Materialising12

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Surely Everyones Buying Computers?

UK Online 2006 - 2013

Significant mail-order persists%AgeGroupWeb of Intrigue 1: Internet Growth Is Not Materialising13

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

% Category Total Captured 2012

Web of Intrigue 1: Internet Growth Is Not Materialising14

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Drivers of Internet GrowthDriverNon-store sales (66%)Mail order, TV shopping, InsuranceBranded commoditiesBranded electricals (not bespoke systems)GroceryDigital goodsMusic, video, software, ebooksReasonChannel displacementaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaPrice comparisonaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaCompetitive responseElectronically transferrableaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

Web of Intrigue 1: Internet Growth Is Not Materialising15

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Death of the High-Street?

Chain branch trendsNet shedding mainly in services such BanksBuilding societiesPost officesTravel agencies etc.Also easy-capture retailing such as music, video, software etc.Web of Intrigue 1: Internet Growth Is Not Materialising16

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Sales Forecasts Grossly Over-StatedGrowth reporting flawed: fails to differentiateCanabalisation v non-store Home delivery v click-and-collect

Diversion from shops far lower than predictedShopping hinges on see, touch, feel, experience

On current trajectory UK 2020 internet sales14-15% total retail salesWeb of Intrigue 1: Internet Growth Is Not Materialising17

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Growth Under 50% predictedClear Evidence of Hype, Hysteria, Puff, DenialWeb of Intrigue 1: Internet Growth Is Not Materialising18

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Growth is SLOWINGEARLY and ABRUPTYWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly19

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

% Category Total Captured 2012

Failing to penetrate markets 15 times the sizeSignificant bricks-and-mortar fulfilment remainsWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly20

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Dramatic Unexpected Asymmetry66%8%No logistical barriersElectronically transferrable goodsOnline suits buyersLogistical barriersComplex salesExperiential salesWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly21

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Home Delivery Trails Sales Growth

Electronically transferrable displacement

Click-and-collect

Online grocery shopping irregularWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly22

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Behind the HeadlinesGrowth overwhelmingly from electronically transferrable goods

The bulk of trade is from services not retailing

Reports include misclassified sales especially travel

Home delivery growth shows its just a selling channelWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly23

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

The Glory Days Are PastDownloadable market capturedMusic, Film, Software

Non-store trade captured years agoWeb of Intrigue 1: Internet Growth Is Slowing Early & Abruptly24

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Internet Growth is Crashing

Sales Growth Online vs All-Retail (%)Web of Intrigue 1: Internet Growth Is Slowing Early & Abruptly25

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

The Dot.Com bubble has NOT YET burstWeb of Intrigue 1: The Dot.Com Bubble Has Not Yet Burst26

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Once Upon a TimeIts peanuts to set up a business seen by billions of eyeballs everydayWeb of Intrigue 1: The Dot.Com Bubble Has Not Yet Burst27

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Is Being Online Easy Money?Legions of entrants make price competition fierceMany inexperienced even naveBusiness seem profitable but are transientFew plan adequate margin for sustainable profitsIncreased logistics costsProhibitive as item value decreasesIncremental picking and logistics (supermarkets)Very few successful pureplaysThose that are, are increasing margins (eBuyer, Scan)Web of Intrigue 1: The Dot.Com Bubble Has Not Yet Burst28

Target Open Day Sep 19, 2014 | The Village Hotel, Leeds, UK

Anyone Can Be a Millionaire?Firm SizeAverage Value of Sales via InternetOnline Revenue as % of Total TurnoverMicro (