Car site reverses on to high street

E-commerce

There has been speculation about whether dot.coms will start to seek a physical presence on the high street to boost brand awareness and sales. Now it is starting to happen.

There has been speculation about whether dot.coms will start to seek a physical presence on the high street to boost brand awareness and sales. Now it is starting to happen.

Monday will see the doors open on the first of a chain of internet "car" cafés from Tins, a new online car dealer. Tins.co.uk, a wholly owned subsidiary of Pendragon, one of Britain's largest car dealers, opens its first shop on Mansell Street in the City of London. Another will open in the Merry Hill centre near Birmingham this month, with a third planned for London's Mayfair later this year. Up to a dozen will open in major cities such as Manchester, Glasgow and Newcastle.

Ken Trinder, managing director of tins.co.uk, says the idea is to offer an alternative route to market. Accepting that not all consumers will be happy buying a new or used car solely online with no face-to-face contact, tins believes a network of physical "stores" will broaden its appeal. It also believes the backing of a major national group like Pendragon will reassure customers concerned about the security of online transactions.

Tins is investing £1.5m in the project, with the rent alone on the first London store costing £250,000 a year, plus £150,000 for refurbishment. The huge costs mean it will need its cafés to have a significant impact on sales to justify the outlay. Since its website began trading in May tins has sold 100 cars, with 220 on order. It thinks Virgin's aim of selling 24,000 cars online a year is unrealisable, although it does believe that 20 per cent of cars will be bought online within five years.

The cafés will be fairly functional affairs, with a coffee bar and half-a-dozen terminals. Tins acknowledges that some consumers may wander in and try to use their computers to send e-mail to their mates, and is relying on its staff to have a quiet word with anyone they feel may be taking liberties.

Will it work? Tins - so named because it is short "and we wanted something to do with metal" - has a good pedigree. It began as the fleet car arm of Pendragon, selling about 10,000 cars a year. Two years ago a group of its executives put a proposal to the Pendragon board to sell cars online. Having bought two software companies and arranged sourcing options, it now has 22,000 new and used cars on its site. Used car buyers can view images of the cars they are interested in and arrange test drives.

The problem is that this is an increasingly crowded market as major companies seek to capitalise on high UK prices for new cars. Rivals include Virgin, OneSwoop, Jamjar.com, Autobyetel and Carbusters, the Consumers' Association site, and more are joining the race.

Tins' decision to offer a high street presence is a bold step that could help make up for its relatively unknown brand name. It is certainly a marker for other dot.coms, which are beginning to acknowledge that an online presence on its own may not be enough to become a mass market player.

As the dot.com community grows nervous as venture capital funding dries up and cash runs out, many may find themselves rushing into the arms of traditional high street retailers offering deep pockets, brand strength and a high street presence in return for Net expertise.

An amusing e-mail item is being circulated among IT professionals. It goes like this:

Three beggars are begging on Wall Street. The first wrote "Beggar" on his broken cup and collected $10 in one day.

The next day, the second beggar wrote "Beggar.com" on his cup and at the end of the day had received hundreds of thousands of dollars, plus an offer to float an IPO on Nasdaq.

The following day the third beggar wrote "e-Beg" on his cup. Microsoft, IBM and Hewlett-Packard sent corporate vice-presidents to talk to him about strategic alliances and offered him free hardware consultancy. It was reported on network news that e-Beg uses 95 per cent Oracle technology and that it had announced the launch of BegTradeMatrix, a B2B industry portal offering supply chain integration in the beggar community.

Interesting that in the supposedly paperless world of the internet a study has been prepared to monitor coverage of dot.coms in newspapers. The "Dot.comment" report by PR firm Marbles, finds that between March and May 293 articles were written on the ubiquitous lastminute.com. How many mentioned Martha Lane Fox? Just 73. How disappointing for the poor thing.

Jargonbusters

e-penetration: Not what you might think, but a term used to define a dot.com's market share, or geographic coverage.

e-profit: Mythical creature, dreamt of by countless would-be e-millionaires.