Interactive mall on right track?

E-commerce
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The Independent Online

The blurring of the boundaries between the physical and virtual worlds continues apace. The latest attempt to bring the two together comes from Dickson Poon, the Hong Kong retail tycoon who owns a controlling stake in Harvey Nichols.

The blurring of the boundaries between the physical and virtual worlds continues apace. The latest attempt to bring the two together comes from Dickson Poon, the Hong Kong retail tycoon who owns a controlling stake in Harvey Nichols.

Next Monday sees the formal launch of the Dickson CyberExpress, which Mr Harvey Nicks claims will be the world's first fully interactive shopping mall.

Located in Kowloon railway station, in Hong Kong, the idea behind the £35m project is to create a multi-channel retail offer which will enable shoppers to buy goods either from the mall or order them from internet terminals which will be scattered around the station concourse. Mr Poon's representatives have already been instructed to seek potential locations in the UK, with Waterloo and King's Cross stations seen as possible targets.

In Kowloon, Mr Poon has taken over the retail space around the perimeter of the station. In the middle he has developed a series of themed "zones", which match the stores around the outside and the online version on the internet.

The theory is that people using the station will be able to use the zones to try out goods that may be too bulky to test in the stores - like bicycles or sports goods. Each zone will have internet terminals enabling customers to place orders even when the demonstrator areas are closed.

Digital technology is also being used to encourage interactivity. In the cosmetics zone, for example, shoppers will be able to give themselves a virtual makeover by taking an image of their faces and then testing various make-ups. Other possibilities include transposing their face on to a magazine cover and e-mailing it to a friend.

Will it work? The idea of having stores, internet terminals and demonstrator areas all built around a common theme has some promise. But the terminals are likely to be redundant when the demonstrator areas are open - which is most of the time. Also, shops in Hong Kong are open late anyway, so why bother? And having bicycle demonstrators is all very well, but what's to stop rogue customers peddling off with one?

The other point is that placing Web-enabled PC terminals in shops is actually nothing new. K-Mart and Gap are just two US retailers that have terminals in stores and WH Smith has been running a trial here in some railway station outlets. Apart from all that lot, it's a brilliant idea.

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The monthly meeting of the First Tuesday internet "match-making" club proved instructive last week. As usual the venue was packed with dot.com entrepreneurs hoping to meet the venture capitalist backer of their dreams. The 450-strong crowd also showed a healthy ratio of only three entrepreneurs to every one venture capitalist.

Two interesting points emerged. One is that neither side seemed particular good in the networking department. Despite paying £10 to get in and coughing up a further £2.50 for a can of lager, many dot.commers stood on their own staring at the ceiling. Some VCs were even left talking to each other in groups or allowed to shuffle about on their tod. With dot.com enterprises tanking by the day due to lack of cash you'd expect them to be mobbed. But then, this is England.

The other point was the frightening youth of some of the VCs, some of whom barely looked old enough to be served at the bar. I'm sure they are all wizards on the Web but do they understand anything about business and finance? But then do some of the older, wiser heads, understand the internet? Perhaps this explains why there have been so many duff internet investments?

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David Shaw of Sabrelance, a financial adviser group, is one investor who seems to have backed more winners than losers.

His group, which represents a group of four rich city bankers, has backed companies such as OneclickHR and is now in talks with Stormline, Freeserve's radio station. But his views on the B2C market are scathing. His opinion is based on a deep suspicion of the surveys on internet penetration in Britain. His argument goes like this. "I don't accept that 13 million people are on the internet in this country. The reality is that Freeserve has 2 million subscribers with the rest a long way behind.

"And there is a lot of double counting, with many houses operating more than one portal. We are lucky if there are a million people really using the Web. And in terms of people actually buying things - B2C - we are talking a few tens of thousands. I couldn't back a Clickmango-type business because they are predicated on a wrong assumption about B2C in the first place." Ouch.

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Jargonbusters

More e-language from Elderstreet, the internet venture capitalists.

Seed round: credit limit on a Visa card.

Smart money: VC who will merge you with one of their under-performing investments.

Incubator: investment company where everyone makes money except the investors.

Logistics: the boring bit of actually having to deliver the goods to the customer.

Eyeballs: double the number of customers

LINUX: character in a Peanuts cartoon.

n.cope@independent.co.uk

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