Auckland company launches online shopping trial

About 80 Auckland households are to take part in an online shopping trial based on Telecom's Xtra and Woolworths' supermarket.

Online shopping has taken a step forward with the launch of the pilot of The Great New Zealand Shopping Mall.

About 80 Auckland households will test The Mall for eight to 12 weeks, initially using the service to buy groceries from Woolworths supermarket. Slated to go public in February 1997, the shopping service will feature up to 16 retailers covering pharmacy, whiteware, home appliance, general merchandising, apparel and travel products.

The Mall site belongs to Auckland start-up company Online Retail Systems which develops retail sites and hosts them for a monthly charge. Using Powerbuilder from Sybase subsidiary Powersoft, Online Retail Systems has also developed an online shopping application, Virtual Shop Assistant, which is sent to customers on floppy disk.

"Having the application on the customers' PC means only a minimum of information is sent across the Internet which means the service is fast," says Online Retail Systems managing director Andrew Faris. "One of the criticisms of online shopping has been that it is slow and hard to use. We've designed this application to be as fast and simple to use as possible."

The Mall is accessed through Telecom Xtra. Faris says development costs to retailers depend on the complexity of the retail operation. "We analyse every aspect of their operation and their customers and use that analysis to develop a customised application, Online Shopping Assistant, for them."

The BNZ will handle financial transactions for The Mall. "With Woolworths, as customers go through the checkout they authorise us to direct debit their account. This doesn't happen until we have information that the order has been filled by Woolworths and picked up by Courier Post. Details are passed to the BNZ for overnight processing," says Faris.

The required banking information is gathered via a direct debit authority form so that at no time are customers' banking details online. Customers are charged for the direct debit.

Faris describes Woolworths as the "anchor tenant" which will pull shoppers into the mall. "Woolworths will bring critical mass to the mall. We're targeting volume and repeat purchases and our aim is to have supermarket home shoppers make three out of every four shops via the Mall."

Customers involved in the trial click on a Woolworths button, which brings up their regular shopping list which can be adjusted or replaced with a new one. They can search for products, which brings up product prices and such things as nutritional information.

They select delivery details and the order is submitted to The Mall server. Details are passed to Woolworths for picking and packing and delivery details passed on to Courier Post. Woolworths confirm back to the Mall server that the order has been fulfilled.

Information from the retailers is updated each night and they have real-time access to the mall server to make any adjustments.

Faris says the cost of home delivery will be set at the end of the pilot and from traillists' feedback.

"The most successful online shopping in the United States costs US$6.95 + 5% of the order. There is also a membership fee and access cost. That has proved to be an acceptable charge. We will charge for delivery but there will be no membership fee. There will also be the Xtra access charge."

Customers will also be offered an advertising and direct marketing service so that when they log on they will be told about product specials and other marketing information relevant to them.

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