NEW YORK -- In 1973, Walter Forbes had an idea for an electronic shopping service. It took the rest of the world nearly 20 years to catch up with him.
Forbes is chairman and chief executive of CUC International, a company that offers low tech interactive shopping through membership, but is on the verge of a high tech interactive TV shopping breakthrough.
Customers pay a membership fee to use CUC's Shopper's Advantage system, either by calling over the telephone or accessing it through an on-line computer service like Prodigy. Membership puts a data base of over 250,000 brand-name products, discounted 10 to 50 percent, at a customer's fingertips. The leverage of 31 million members allows the company to negotiate sharp prices, Forbes said.
CUC charges from $13 to $49 annually to use its services, which range from shopping and travel to dining. The Shopper's Advantage membership fee also includes a two-year guarantee for every purchase.
Most of CUC's revenues come from the membership fees. Forbes said the company keeps a very small percentage of product sales -- about 5 percent -- with the bulk of the sale going directly to the manufacturer.
Last year, Stamford, Conn.-based CUC had revenues of $879 million. Next year, analysts predict the company's revenues will top $1 billion.
But Forbes admits his journey to the interactive superhighway was not always smooth. Several times, he watched losses pile up and investors vanish.
Tenacious though he was, however, Forbes was no fool. He had the good sense to adapt his electronic shopping model to the available technology -- the telephone. Customers called a CUC representative to get product information and prices, then placed an order.
The company has been revamping its on-line computer service to include pictures and is planning to put its shopping offerings on CD-ROM.
The company's fortunes changed in 1983, when Walter Loeb, president of a retail consulting firm that bears his name, enlisted Morgan Stanley to take the company public after hearing Forbes speak to a group of European businessmen. It then had $4 million in sales.
Wall Street analysts now believe CUC is poised to dominate interactive home shopping.
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