Being a shopkeeper does not make you an online retailer
A guy I have dealt with this year is giving up on his E-Commerce website after trying to sell some of the stock from his single high street retail outlet online. Less than six months later and an investment of £2,300 the website is making sales, but obviously not enough to keep it up and build the sales. The problem is this (and he is not unique).
He has a small shop in a town and a flow of footfall giving him a captured buyer. That model is centuries old and he can accept the way that works. The online shop has low overheads and six months is not realistic in building up an online retail business.
He can open the door of his high street shop, let a shopper come in, browse the store; pick up his products, feel the quality and pay the premium he charges to buy it there and then. The experience is personal and the shopper has emotionally invested in the purchase. After all, they are having to make the effort.
Online, the interaction is different. The tables are turned in terms of effort and people won’t pay price premiums because:
- They can buy the same products without such a high markup from a number of competitors just a few clicks away.
- There is nothing emotional to create the engagement between the shop and the buyer.
Consumers want more online, or less if you take prices into consideration. It’s different from bricks and mortar retailing and a different set of emotional engagement is required. It’s not expensive to generate and it can create excellent value in terms of building up a regular client base.
It’s called added value.
Comment by Jerad Kaliher September 12, 2007 @ 8:52 am
I’ve noticed that many people have made the same comments about creating added value. I use the Internet and brick and mortar as a research tool. I find what I like based on what other people that are like me like, how they rate it and what it can do for me. Then I go into the store, test the product in my hands. Then I come back and find the lowest possible price point online, if I can’t find it I buy it from the brick and mortar.
This may be because I am a market maven and I could care less about creating value. But then again I do often frequent the same shops and my method works in the same way.
In the long run, maybe this client of yours created a way for people like me to have an external source of information rather than an emotional connection.
Comment by Craig Killick September 12, 2007 @ 9:38 am
It’s a very good point Jerad and a very valid business model. To reach further afield though you will always need to be (at least seen to) add value.
I guess that is the opportunity cost of creating that value.