Barclays launches Indigo Square commerce site

Most Internet users won't shop online because of security and ease-of-use concerns. Barclays plans to change all that single-handedly with a new site

A new e-mall, designed to chase away consumer concerns over online security in time for Christmas, is being launched by Barclays. The big bank hopes aims to get 13 million people interested in e-commerce with the mall, dubbed Indigo Square.

IndigoSquare (www.indigosquare.com), a £30m joint venture between Barclays Group and investment bank Nomura International, is a follow-up to Barclay Square, an early attempt at creating an online shopping mall. Barclay Square was a early e-commerce casualty suffering from a lack of take-up due to its registration requirement and the fact that only selected retailers were allowed to join the scheme.

IndigoSquare tosses out its predecessor's "walled garden" approach, instead offering a broad portal to over one million products offered by 50 online retailers. The company promises the number of retailers will increase to 100 by Christmas.

Key is IndigoSquare's decision to associate the site with the Barclaycard brand. The company hopes it will give customers a feeling of security they might lack when heading to the latest fly-by-night e-commerce outfit.

Barclays concedes that a lack of confidence is one of the main factors preventing Internet users from shopping online. "There are around 17 million people online at the moment, but only around four million are shopping. That means 13 million are not shopping," said IndigoSquare chief executive Mark Shea. "When you look heavily at that group, over 90 percent want to shop, but [security issues are] holding them back."

The new site solves that problem, Shea believes. "It could make a fundamental difference," he said. "By removing the barriers of security and ease-of-use there's no longer any reason why those people will not shop online."

IndigoSquare launches as concerns increase over the lack of security and unreliability of UK shopping sites. A recent study by the Trade Standards Institute found more than a third of 102 UK-based e-commerce sites were problematic, with 38 percent of orders not arriving on time and a surprising 17 percent unfulfilled because of system crashes, out-of-stock items, forgotten orders, or companies collapsing.

Another study found online retailers were often lax in responding to customers or giving out contact information.

Sceptics about IndigoSquare might point to the collapse of Barclay Square, but Shea says the new venture has learned from past mistakes. "There were a couple of key learnings from Barlcay Square: one is that choice is key," he said. "You need a large number of retailers and products. Because of the walled-garden controlled environment, Barclay Square had a limited number of retailers."

The new site is a gateway into e-commerce sites such as Micro Warehouse and Interflora, bringing together everything from kitchen supplies to video games into one site. Retailers do not have to pay a fee to be listed; IndigoSquare gets a commission on each sale made through its referrals. Barclays vets its retail partners and guarantees the security and ease-of-use of its partners' sites, for example requiring they provide contact details and a reference number as confirmation of your purchase.

However, each partner has its own payment system, so, for example, if you order three products from three different partners, you will have to enter your credit card number three times.

Customers might also find some categories a bit sparsely-stocked to begin with: book partners, for example, do not include any of the major online booksellers such as bol.com, waterstones.co.uk or amazon.co.uk.

IndigoSquare will be supported by £10m of advertising in the first 12 months, the company said.

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