Nikki Baird

Braintrust Query: Why You Should Abandon Having an Online Retail Store

February 1, 2010

FROM RETAILWIRE:
With the struggling economy, a lot of independent bricks and mortar stores are saying they need to build an online store. The reality: major brands are segmenting visitors to their websites by person.... Is the e-commerce technology gap between independent retailers and major retailers too wide?      [more...]

Well, I have two thoughts on the matter. First, I frequently hear from big retail chains that all of the data they get from their online sites is not getting used to the degree that they would like. They may get the slices and dices of 5.55 million transactions a day, but that doesn't mean they are driving any insights out of it, or even more importantly, that they are using those insights to influence customer behavior. Also, along those lines, a lot of the personalization capabilities, often as a plug-in to a site ("Just paste the code here!" the vendors say), requires resources to administer it, monitor it, and again, derive insights and then use those insights to influence behavior. So, don't give more credit to the big guys than they're due.

Second, while I agree that independents should not have wild expectations about what will happen when they open up an online store, I would also say that there is a legitimacy factor involved that should not be dismissed--if you have a "real" website, consumers are going to take you more seriously than if you don't, and if more consumers are starting their shopping trips online, then if you want a shot at those customers, you need to be there. Also, as an independent, theoretically you can start out addressing the gaps that big retailers are struggling with right out of the gate. One customer database, accessible both online and in-store. One inventory database, shared between channels. One loyalty program, one customer care strategy. Addressing these things alone will give an independent a huge advantage over bigger competitors. And there is plenty of great data about customer behavior that independents can have, without a subscription to Nielsen. For example, huge online popularity from a region could suggest a new store location. And, as noted already, there are lots of opportunities to innovate, without the bureaucracy of a big company. Inventory strategies, testing assortment, providing unique content and expertise.... All of these are ways that an independent can make their online experience successful.