Braintrust Query: Why You Should Abandon Having an Online Retail Store
Commentary by Bob
Phibbs, The Retail Doctor
a special arrangement, presented here for discussion is a summary of a current
article from the Retail Doc blog.
With the struggling economy,
I hear a lot of independent bricks and mortar stores saying they need to build
an online store. The image is millions of people perusing your products, shipping
to exotic locales like Pacoima, Paris or Peru; a website delivering the amount
of customers you lost in the last two years with low overhead.
Here’s the reality:
major brands are segmenting visitors to their websites by person; they are tracking
where you the customer went to customize their banner ads and even which page
you will see when you return. They have a valuation for each consumer relative
to each SKU. They know how the consumer will react, to which offerings and
when, how fast they’ll shop and what percent they’ll have to eat in returns.
can connect the dots of a customer’s age and past purchases with other online
sites, household income and spending patterns. They know what the consumer
zoomed in on, what they reviewed, with whom they have social media influence,
and what they researched on a page but purchased on another. They can track
back their online wardrobe purchases from the past six years and build a virtual
closet of what the customer owns.
How do I know this? At the National Retail
Federation’s Big Show, Nielsen said it tracks 5.55 million transactions a day
worldwide and it slices, dices and resells that information to major online
Here’s the point, if you can’t be as committed
as Amazon, Best Buy, Toys “R” Us, and the big boxes to deliver a seamless experience,
then don’t tip-toe around it. Oh and one more thing: to build fans, many of
these big guys are selling merchandise online at a loss. Take a look at today’s
price for Sarah Palin’s Going Rogue. List price is $28; Amazon has it
The easy money online has passed. If you want
to have an online store presence, you need to invest the money to be at least
as good as the big boys. Just like an independent coffeehouse has to be at
least as clean as the local Starbucks, with a speed of service no slower and
with a product at least as fresh, you have to meet the competition’s standards
just to be in the game.
If you can commit to making your site vibrant –
not just a discount place but also offering unedited reviews of your products,
number of items in stock and online chat – have at it! A better use of your
money is to make your website a draw to customers, then give them a reason
to come into your store so you can stand out, sell more and develop a relationship
built on something other than low price.
Questions: Is the e-commerce technology gap between independent
retailers and major retailers too wide? What should independent retailers
be doing with their websites in order to compete?