Have the e-gurus really blown IT?

By Karyn Scherer

Between the lines


Okay, hands up who got a subscription to NetGuide for Christmas? Better still, who bought at least one Christmas pressie over the net?

As I suspected, not many of you. Well, maybe this year. After all, this is the year e-tailing is finally expected to take off in New Zealand.

Pigs might fly, you say, but you shouldn't be so cynical. As our very own supermodel likes to tell us in that shampoo ad: it won't happen overnight, but it will happen.

Over the next few months, Rupert Murdoch's joint venture with Japanese internet investor Softbank, eVentures, will begin flexing its muscles on the local market under the stewardship of media maven Cindy Michener.

New Zealand's biggest music retailer, Sounds, also hopes to have a major impact this year with a web site that not only offers CDs for sale, but has eight online radio stations, an online record label, live concerts, and video and movie clips. A free magazine linked to the venture is expected to hit stores in March.

The travel industry is finally getting its act together, and so are other mainstream retailers, convinced by the likes of FlyingPig that there will be a local online market.

It's not going to be too long now before the internet will be available through your phone and TV set. This will be a boon for e-tailers, whose potential audience at this point is still fairly small.

However, retailers are going to have to tread carefully in this new era.

The problem with the e-revolution is the hype that has preceded it. Too many e-gurus have been predicting the death of retail as we know it, but like all new fads, the internet needs to be kept in perspective.

As a giant global library it is a fantastic resource, although not without its flaws. It also looks like being an incredibly efficient new tool for some businesses, which will be able to slash their operating costs.

But making it work in a market of 4 million people is quite a different proposition from targeting the entire United States, or the entire world.

Clearly, anyone who believes it is not going to have a significant effect on the world of retailing is just plain stupid. As is anyone who thinks the days of the bricks-and-mortar store are numbered.

So it was refreshing to see brokers in this country not succumbing to the technology hysteria which has been sweeping the United States in naming their picks for 2000.

While Advantage Group was indisputably an outstanding investment last year, few brokers mentioned it as this year's story.

Their most popular pick? It was not a technology stock, but The Warehouse Group, a company that is taking e-commerce very seriously indeed, but is not losing its head over it.