The internet has already brought huge efficiencies to retailing and choice to consumers, says Stelios Haji-Ioannou. There is more to come

The internet revolution of the late 1990s came with much hype and consequent fallout but a distinct legacy has been left behind. With the click of a mouse and from the comfort of their own homes or offices, consumers all over the world can now buy goods, and even more so services, on the internet, often supplied to them by a business far away, possibly even in another country.

You must be kidding!

The first big retailing change that my “easy” businesses noticed was in the distribution of travel-related products. Some nine years ago I was greeted with a mixture of mirth and scepticism as I had the web address of my airline painted in large orange letters along the fuselage of its aircraft. The incentive I gave to consumers to buy flights online was a better price, and more than 100 million passengers have taken easyJet up on that offer since its inception. In addition, other travel-related services, where consumers do not really need to see products in advance, can be easily distributed through online retailing (car hire, hotel rooms and bus journeys) in my experience. Even those more complicated and emotionally-involved holiday experiences, such as cruises, can be sold mostly online by a known and trusted brand, with only the occasional help from a travel agent for the more complicated and faraway trips.

Online retailing has also succeeded with the sale of physical goods. First books and CDs, and now cars and houses, are bought and sold online. We need look no further than the huge success of eBay to realize that most goods will now sell well over the internet.

It is important for vendors to make a clear distinction if selling online is a cost-reduction exercise, as it was for low-cost airline seats, or the purpose is convenience, like a delivery service for groceries. The latter is a more costly, premium service than, say, shopping at Wal-Mart. As a merchant, you need to know where you stand.

Online pizza?

Personally, I am in the process of seeing how far this concept can be extended into the online retailing of goods by attempting it with both easyPizza delivery and watches. Pizza delivery is, of course, about cooked food, and I am finding out if people will buy this cooked food online and whether they will buy it in advance. Consumers are prepared to buy cooked pizza by telephone for delivery in the next few minutes or hours, and I am pushing that one step further by giving them a financial incentive to buy online for delivery in, for example, a week.

As for watches, I have taken a product that has always retailed in the high street and am saying to consumers that the only place to buy is from my website, where I will give them a better price. By using online distribution of these goods, I will ultimately have a lower cost structure than established market players, such as Domino’s Pizza or Swatch Group, that sell through shops. I will be able to offer consumers an alternative product at a better price.

The increasing intelligence of online search engines is also affecting the retail world. These websites, along with my own online price-comparison service, give consumers access to a host of retailers whose offerings can be studied and compared before those consumers have even left the relative comfort of their own homes or offices. By the time they get to the high street they are already informed about their choice, or they may no longer even need to go to the high street.
Interestingly, such technology has made websites such as Google into, among other things, efficient travel agents. The retail experiment, which I pioneered with my own airline, may have gone full circle, with the notable exception of commission now being paid by suppliers rather than by consumers.

This makes the task of predicting the future all the more difficult, but it does seem that the internet will continue to capitalize on the efficiencies and cost savings that it brings to both retailers and consumers.

The need to innovate and stay ahead of competitors will persist, as we are doing with the European roll-out of easyMobile. Most consumers these days have a mobile handset, so we are selling pre-paid sim cards online. Our overhead is, therefore, leaner than that of our competitors, with the result that we can offer more affordable mobile telephony.

The internet has proved to be a highly-efficient sales and communication tool, bringing suppliers and consumers together as never before and permanently changing the retail landscape. With new technologies and the ability to carry ever more information, this revolution can only continue to bring us more goods and services in an increasingly competitive environment. And it is competition that gives ordinary consumers a better choice.

CV Stelios Haji-Ioannou

Stelios Haji-Ioannou is manager of the easy brand that he licenses to ventures such as easyJet, founded in 1995, where he remains the largest shareholder. He has extended the brand into travel and leisure, telecoms and personal finance.

Editors remark: Th make things even worse, Companies like internet Vikings are now taking advantage of quirks of how the internet work in order to brag abaout (fake) benefit in the search results.