So how does a fellow feed his obsession if he is the only person in Western Canada who craves the recordings of avant-garde jazz musicians released on obscure European labels of the 1960s and 1970s? One thing is certain—he will not find them at his local record store. Two years ago 26-year-old David Hoyle made the discovery that other fans of "his" music—there really were others—were on the Internet. Not only did he find websites devoted to particular artists, he found complete discographies and places where he could order copies of the most limited of editions.

"When I typed in [jazz trumpeter] Bill Dixon's name," says Mr. Hoyle, "my life changed. He was one of several artists I'd heard of but knew little about. Now I've got records by most of them and I've actually corresponded by e-mail with Dixon." Since discovering the Net, Mr. Hoyle reports, he has spent about $7,000 on his passion. "My wife and my accountant are unhappy," he admits, "but I'm thrilled."

Mr. Hoyle—young, educated, culturally sophisticated Edmontonian—is a stereotypical Nethead. But the Web is no longer the exclusive domain of pencil-necked (and pocket-protected) geeks. Instead, according to The Emerging Digital Economy, a report released by the U.S. Commerce Department two weeks ago, Net commerce is the next big thing—as significant in its impact as the computer revolution itself, and credited with being a significant force behind the U.S. economic boom. Commerce Secretary William Daley suggested that without Net bargains and efficiencies, U.S. inflation would have been 3.1% last year rather than 2%.

Large corporations have learned that the Internet is the most efficient way to find and order supplies, giving new meaning to "just in time" inventories. But more important to many individuals and families, the Net is rapidly becoming the shopping mall of choice. Net shopping caters to the modern urge to cocoon. The Net brings together every shopper with every product, with no regard for time or the location of either party. Except that money still has to change hands, Net shopping comes close to putting a Star Trek-type replicator in every home. Select an item, click on the "order" button, and the product usually arrives at your home or office three or four days later.

With the help of the Net you can:

• Sell your own home through the Abele Owners' Network (www.owners.com). Abele offers searches of 30,000 properties across North America by price range, number of bedrooms and region.
• Buy a book, any book, through Amazon.com Inc. (www.amazon.com). Amazon offers over 2.5 million titles and everything is discounted up to 40%, including the latest popular titles.
• Take care of your greeting card needs for up to a year through American Greetings (www.americangreetings.com). Cards can be personalized with a message and photograph. American Greetings will even address, stamp, and mail your cards for you so they arrive on time. The cost is about US$3.
• Live in Podunk, but shop at Bloomingdale's (www.bloomingdales.com). Most of the store's inventory is available on-line and you can enjoy the luxury of a free personal shopper who knows the whole store and can help you choose, wrap, and ship a gift for any occasion.
• Check out new cars at AutoWeb (www.autoweb.com) or Microsoft CarPoint (carpoint.msn.com). Explore the interiors of new models. Find your old car's resale value and get a fix on any car's reliability rating.
• Buy nonperishable groceries on-line in the U.S. from NetGrocer (www.netgrocer.com). Pay by credit card and your groceries arrive in four days via Federal Express.
• Say it with flowers by choosing from 150 bouquets you can view on-line at 1-800-Flowers (www.1800flowers.com)—24 hours a day; a local florist will process your order.

Whatever a body could wish for, CDs and movies, automobile parts and fine wines, travel tips and airline tickets, they are all available on the net. If you are not sure where to shop, try the Internet Mall (www.internetmall.com). With 27,000 separate stores, but only one order form, the Internet Mall dwarfs West Edmonton Mall in size (and convenience) by several orders of magnitude. Jewish shoppers may prefer the KosherMall (www.koshermall.com). Loyal Canadians can stick to Canada's Shopping Mall (www.canadashop.com). And if environmentalism is your bag, the EcoMall (www.ecomall.com) gives greenbacks an entirely new meaning.

For those who concentrate on other forms of wildlife—bulls and bears—E*Trade (www.etrade.com) will allow you to trade stocks with fees ranging from US$14.95 to US$19.95 per transaction. Compare that to "discount broker" Charles Schwab's fee of US$45 to US$170.10 per trade. And for those who prefer their high finance without pinstripes and eyeshades there is Onsale.Com (www.onsale.com), the Web's leading auction house. Put in a bid and raise it later if you have to. Razz your co-bidders with taunting messages. And despite the mischief, the prices are really some of the best around.

Analysts have long marvelled at the Net's ingenuity; so has the public—Net traffic has doubled every 100 days for the last four years. The number of wired users will jump from 82 million to 329 million over the same period. The Commerce Department report also found that the industry employs 7.4 million workers, some of whom earn among the highest salaries in the U.S.

Other significant findings by the Commerce Department include:

• The Internet is growing faster than all other technologies that have preceded it. Radio existed for 38 years before it had 50 million listeners, and TV took 13 years to reach that mark. The Internet exceeded 50 million users in just four years.
• In 1994, a mere three million people worldwide were connected to the Internet. By the end of last year, more than 100 million were using it.

Despite these impressive numbers, analysts have complained the Net lacks the "killer app," the program or use that makes it indispensable—and profitable. Net shopping may be it. Net commerce may surpass US$300 billion by 2002 (from $8 billion in 1997)—this is a sum greater than the combined revenues of Canada's top 25 corporations. Consumers seem to be getting more comfortable making on-line credit card purchases: 10 million people in the United States and Canada had purchased something on the Web by the end of 1997, an increase from 4.7 million people six months earlier.

According to the just released fourth edition of the Morgan Stanley Global Technology Team's IPO Yearbook the Internet has the potential to have as much impact on U.S. public equity markets this decade as personal computers did in the 1980s. The computer revolution in the 1980s sparked huge investment in new technologies as companies in the embryonic industry sought to raise money through public offerings. It could happen again (on a much grander scale) with Net commerce.

Winnipeg-headquartered K-Tel International Ltd. demonstrates how interested the stock market is in Internet commerce. Long ridiculed as the company that marketed such consumer wonders as the Patty Stacker and the Miracle Brush, along with a line of novelty musical recordings, K-Tel saw the share price of its American subsidiary soar from US$7 to US$44.63 in less than two weeks. This based on news the company will sell 250,000 music titles on the Internet.

So who is fuelling the explosive growth in Internet usage? According to a report released last month by the International Data Corporation (IDC) of Framingham, Massachusetts, a survey of 2,000 American households revealed the biggest users are:

• Single boomers. Younger, mostly unmarried with no children and slightly above-average incomes.
• Progressive parents. A well-to-do group driven to any media activity that caters to their children's entertainment or education.
• Country clubbers. Older wealthier couples, with a high rate of daily on-line activity.

In such households everybody gets involved. IDC's research shows that several members in each household—including children and more female heads of households—were going on-line. According to IDC, 18% of U.S. households were on-line by the end of 1997, a number that is forecast to reach 23% by the end of 1998. The latter figure is above what IDC considers to be the critical mass necessary for Internet commerce to be viable.

IDC's survey was American. But Terry Retter, director of strategic technology services at Price Waterhouse's global technology centre in California, told the Vancouver Sun that Canadian computer habits are similar, and even more advanced when it comes to electronic banking.

Vancouver's MegaDepot (www.megadepot.com), an Internet superstore which emphasizes sales of computer products, but also offers kitchenware, specialty CD-ROMs and pet food, is evidence of Canada's readiness to provide leadership in Net commerce. And it is a prime example of how the Net frees retailers from geographical constraints. MegaDepot houses its administrative, sales and marketing people, all 12 of them, in a 1,200-square-foot office suite on downtown Homer Street. That is all the space it needs to sell its 100,000 items to customers across North America. The actual products are housed in 40 distribution centres in Canada and the U.S., ready to be delivered by courier one to three days after orders are placed.

In business less than a year, MegaDepot's Web site already gets more than one million hits a month and expects to do more than $1 million in business in 1998. Co-founder and vice-president Rob Ayer attributes MegaDepot's rapid growth to the experience he and his two partners brought with them. "I had already worked for another Internet marketer and understood logistics and warehouse management," he explains, "so our goal for this company was to develop the most efficient supply chain in the world for consumer-based products." In pursuit of his goal Mr. Ayer "interfaces" with suppliers all over North America. "We're moving information, not product," Mr. Ayer stresses. "We're the epitome of 'just-in, just-out' supply chain management."

Mr. Ayer says MegaDepot's success is attributable to its narrow mission—its refusal to run a retail store with a website tacked on. He says the result is that his customers never feel they are second-class citizens. "It's hard to attract attention on the Web," Mr. Ayer admits. "But if a customer has a good experience with his order, he will be back." MegaDepot boasts a customer return rate of 70% within three months, a figure he says is 10 times higher than traditionally enjoyed by retail businesses.

Even a neophyte websurfer has no difficulty navigating the MegaDepot Website. Every item is pictured on screen, but to overcome the inability to examine a product directly before purchase, MegaDepot relies on extensive on-line information and expert forums. Questions about a product can be sent by e-mail. But a visitor to a forum can access all previous questions, very likely getting the answers he needs. Prices are competitive with major discount retailers. And because MegaDepot does not maintain large, in-house inventories, it can lower prices in lock-step with the manufacturer—a tremendous advantage in the savagely competitive computer world.

Almost 100% of the purchases made from MegaDepot are by credit card. But Mr. Ayer says security is not a problem. "When you want to transmit secure information," he explains, "you ask for a secure page that uses 128-bit encryption technology. That's more security than you can get on the telephone."

Indeed, as fast as e-commerce is growing, concern over security keeps it from growing even faster. A survey done earlier this year by Georgia Tech University, for instance, found that privacy issues were the major reason why computer users avoid shopping on the Net. Either they leave without giving information, or falsify the information they give.

But Ann Cavoukian, head of the Information and Privacy Commission of Ontario and co-author of Who Knows: Safeguarding Your Privacy in a Networked World, says that security issues, while important, need not keep consumers from Net shopping. She points out that there are on-line businesses that track users' clickstreams. "You should never assume that your ordinary transmissions and transactions are private," he says. "A secure transaction where an encryption system is used will keep your credit card numbers and other information private."

Today's encryption is good enough that Ms. Cavoukian does all her personal banking on-line. "But you should always know what security system is used," she says. "A legitimate site will go out of its way to tell you." Another problem for Net users, she says, is that businesses often sell their customer list. "Most businesses will take your name off the list if you ask," she says, "but you should never assume your name isn't being used in ways you did not authorize."

Ms. Cavoukian notes with irony that individuals have better privacy protection from government than from business. "[George] Orwell never anticipated 'little brother,'" she says. "He couldn't even imagine the technology." Businesses have recognized that legitimate fears are keeping would-be shoppers off the Net, reports Ms. Cavoukian. But a privacy summit held in New York in late April was attempting to develop guidelines and procedures that will boost consumer confidence.

As with any technological leap forward, the higher paid and better educated have been the first to benefit from Net commerce. But according to a study published in the journal Science, a "digital divide" has separated blacks and whites in cyberspace irrespective of income. At university level fewer than one-third of black students own a home computer, compared to 73% of white students. The study did find, however, that far more blacks than whites said they were planning to buy a computer within the next six months.

Nor has every form of Net commerce benefitted equally. Thousands of news sites, for instance, were established in the expectation that corporate riches would soon follow. To give readers a taste of the new technology, they were mostly free-for a limited time only. Years later, Net publishers have had little success charging for information they have been giving away. And many companies which did charge, like the Los Angeles Times, have given up and gone back to a free service. Only a few publications with specialized readerships, like the Wall Street Journal, have been able to maintain a fee-for-content policy.

Microsoft's Internet magazine Slate, established as a temporary free service since 1996, started charging its readers two months ago. So far, says publisher Rogers Weed, only 17,000 have signed up at US$19.95 a year. "The challenge," says Mr. Weed, "is to figure out what the Web can add that other magazines can't." He reports that his magazine's most popular feature is a daily summary of news e-mailed to each subscriber's computer at 3 a.m. But the ability to dialogue with the editorial staff is also catching on. "I believe the paid field will grow," Mr. Weed insists. "We just have to find out what we do best."

While websurfers are not willing to pay for digital delivery of the world's great newspapers and magazines, they will (and do) pay for pornography. USA Today reported last year that 28.2% of Americans visited pornographic websites last May, up from 23% a year earlier. One reason for the explosive success of the VCR was that it enabled X-rated movies to be watched at home. The Net makes pornography even more private. No longer are potentially embarrassing trips to magazine and videostores required; pornsites make pictures, movies stories and names all available with the click of a mouse.

Despite the hype surrounding e-commerce, Barry Parr, IDC's director for consumer Internet research, says no one should fear it represents the end of traditional shopping malls. He points out that Internet commerce still represents a small fraction of the total. "My sense is that this is not so different from catalogue shopping," he says. "In terms of the culture, it will be nothing like the impact of Wal-Mart." Mr. Parr suspects that Net shopping's most profound effect will be on traditional catalogue retailers. He adds, however, that it will be relatively easy for them to go on-line. "They already have the back office set up," he notes.

Besides an almost unlimited inventory, Net shopping may yet succeed beyond even its wildest promoters' dreams. An influx of new access devices, including information appliances, network computers, WebTV and gaming consoles will make Internet access easier than ever. And new network technology promises to make Internet communication almost instantaneous. Already a customer can listen to 30 seconds of songs on CDs before deciding what to purchase. And a few outlets offer the option of creating personalized CDs with various songs chosen by the customer.

But that is only the beginning. According to Geoffrey Shmigelsky of Calgary, president of Cadvision, the largest Internet provider in Western Canada, "It is only a matter of time before you see a Jerry Seinfeld show, and you like the shirt he's wearing and you click on that and the computer will bring you to a Web site to get you the proper size and fit, before sending it to you by courier."

—Shafer Parker Jr.

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