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Is internet killing the traditional store?

Discussion in 'Marketing' started by King, Nov 23, 2010.

  1. King

    King Well-Known Member

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    Here is an interesting article from the Sydney Morning herald on the impact of online shipping on bricks and mortar stores.

    Questions for here are:

    1. If you are a traditional store, is online competition hurting you?

    2. Are you going online to compete?

    3. Are you online and perhaps going the other way - to a real world physical store and why?
  2. flower-child

    flower-child Active Member

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    I have both and I would say 65-75% of my $$ are earnt online
  3. vintagefabrics

    vintagefabrics New Member

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    We have been an online business for seven years and we're now thinking of expanding into the brick and mortar market - so we're doing it the other way around. We sell fabric - an item most people like to hold before they purchase - and we feel not having a walk-in store reduces our local market...
  4. King

    King Well-Known Member

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    So Miley, as a business owner, what is your experience - are you online/offline or both?
  5. Ding Duck

    Ding Duck New Member

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    G'day all,

    From what I have seen in my hobby, the internet is making severe inroads into the traditional store. It has also seen suppliers that have an online presence be thrown out of shops, as they use the shop to promote their product, and with the product, they include a web address for further sales.

    The way that my business plan was set up was that the stores would promote my product on their website, so clients could come to them and purchase from the shops. A couple of people have tried to track the product down, but it is hard when the shop name and phone number are the only things on the packaging. By my doing that, I am helping to promote the shop and give the shop return business.

    My figuring is that it is easier for me to get 100% for my product rather than have to chase around to get 150% for my product. Maybe I am barking up the wrong tree by wanting to support other small business, but, I am only thinking of the hobby and other traders...

    Ding.
  6. Gomage

    Gomage New Member

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    I will not buy cloths on-line. Never! Very often I saw a thing I liked I tryed it on and understood that it did not fit me.
    As for home appliencies they will leave real live I think
  7. FS Concierge

    FS Concierge Administrator Staff Member

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    Sorry Matt, Miley was a spammer and is gone now.

    cheers
    Jayne
  8. travelmaster

    travelmaster Active Member

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    If ever there was a subject that is so close to my business and my heart - this is the one. Thks King for posting it.

    The stats say, that out of all purchases made online, travel represents the largest proportion. I think something like 30% of all money spent on the net is on travel or travel related products. So the internet has definitely made a huge impact on this industry.

    But it is all about perceptions. The first thing you hear when asked if buying on the net is cheaper is yes, of course. There is no way of changing that perception. The shift to the net is also very "demographically" segmented with younger generation a lot more likely to buy on the net.

    What does it all mean for us the travel agents ? We've thought and thought about the ways to deal with it and we've changed the way we "sell". Anyone who is simply fighting the net on price might as well pack up. When pple ask me why is it so and so much on the net we just say that:
    - on the net YOU do the work
    - good luck calling an airline or whatever if the crap hits the fan

    Weekend papers are always full of letters to editor with complaints that this or that wasn't done properly but the author never mentions the fact that they booked it on the net. So it's simple - if you book it on the net - buyer beware rule applies.

    Fortunately I can happily report that the net is not killing my traditional store. We've learnt to deal with it in our own ways. But it sure has a huge impact on the industry.
  9. King

    King Well-Known Member

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    Than ks for that Travelmaster. I am in the travel space too - online- and it is a killer environment out there. I suspect that maybe even tougher than for physical stores due to the monopolies of the big few.
  10. mark_xpnsit

    mark_xpnsit Member

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    I think there will always be a place for the specalisted offline outfit though, someone who can provide personalised service. The problem has been that customer service by traditional retailers has been so poor in many cases that for many people they have offered no additional value and therefore we may as well buy online.

    In travel for instance I can see how a specalised upper market travel agency could work really well offline, but perhaps not so well online.
  11. AnaLucia

    AnaLucia Member

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    I have a shop and also sell online, and for the first time ever the month of October our internet sales were more than our sales from the Front Door or our Shop. Online is getting really huge in Australia and we have to jump on the train as it already started its way up.
    We have been really busy with the shop, specially this time of the year: so I have found my self doing almost all my shopping online: is because really really: I don't have time to go out and see shops and try jeans and get upset with their "offers" of buy one for $79 or two for $100...??? I do enjoy buying online, I think is part of this generation where we are at, we might as well make the best out of it!
  12. King

    King Well-Known Member

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    WOW - thanks AnaLucia - that is really interesting to hear.

    Will be interesting to see how things go over the next 12 months. Maybe this time next year the store will be more of a glorified warehouse perhaps for stock for online sales?
  13. JohnW

    JohnW Well-Known Member

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    There are a few very successful online stores compared to the many that die an expensive death.

    As some folk have already commented, the product type has a big bearing on its online acceptance.

    If you are selling books, CDs, videos, travel, insurance, or a host of other categories where you don't need to feel the product or try it for size, then you are more vulnerable to online competition.

    I believe what will create an even bigger impact on the growth of retail sales is the spread of smartphone usage.

    Put a mobile "readable" sign in your shop window and you could achieve results you have never before imagined.

    Want to know how this could happen? Send me a PM.

    Regs,
  14. King

    King Well-Known Member

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    Why not just share it with the whole community?
  15. King

    King Well-Known Member

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    I was talking to a store owner today - well, they have several physical stores that sell furniture. He said they have been selling stock that was slow to move in the shops, on Ebay and he is selling heaps at great profit.

    He is amazed: "who would have thought" he said.
  16. Thebookbarn.com.au

    Thebookbarn.com.au New Member

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    My family has been in the retail book business for nearly 20 years, we have three bricks and mortar stores.
    Over the past 20 years on average we've increase our sales by around 5% every year but this year the growth has slowed to about 2%.
    I can't say for certain that this is due to more people shopping online, it may also be the recent financial crisis. It may also be due to growth if e-books and e-readers.
    It may also be due to the presence of more bricks and mortar book stores that are popping up around the place.

    In order to cover our bets, we've recently set up an online store, so far sales are slow, I think mainly because we're still working out the best marketing approach. But ask me again in a years time and I'm sure I'll have a better picture of the situation, hopefully online sales will be a boost to our income.

    Having said that, our bricks and mortar store are still making a good profit, and unless things change dramatically in the next five to ten years, I can't imagine we'll be closing any of these stores anytime soon.

    Paul
  17. King

    King Well-Known Member

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    Great news Paul. I wonder if ebooks will make an impact??

    Have you changed the bookstores at all over the years - have you needed to offer any other 'value-add' or has the traditional shelves/till system been maintained in order to keep that growth happening?

    I think as your database of customer emails grows, and this allows you to push offers/new releases etc to them more, that this may see online grow, especially for people who are not within an easy drive of the stores.
  18. Thebookbarn.com.au

    Thebookbarn.com.au New Member

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    Personally I'm not too worried about the growth of the ebook.
    There's a lot of industry buzz surrounding them, but that buzz seems to be generated by the people who have the most to gain if they succeed.
    For example, Amazon has invested in their e-reader kindle, and now Amazon is going around and telling everyone how great e-books are.
    Never mind the fact that they've tried their the make their e-reader imitate as closely as possible the look and feel of a book.
    I think for most people if they want something that looks and feels like a book, they'll go and buy... a book.
    There's also a lot of talk about how the next generation will be making the move towards e-books. I'm not seeing that either. Our biggest selling range is without doubt children's books.

    As for the questions of value add ons, we've expanded into a range of artist quality paints and art materials at one of our locations, simply because there was a demand for it in the area.
    But apart from a computerized inventory system, nothing much else has changed since the first day we opened.

    But if I'm wrong and the online market does begin to overshadow the bricks and mortar locations in the next few years, I intend to be in a position where I can capture a percentage of that market.
  19. King

    King Well-Known Member

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    I feel you are right about e-books. My kids like digital for sound/motion, but all enjoy a real book :)
  20. marketingweb

    marketingweb Active Member

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    Hi Paul,

    I think in some ways you are right - the internet IS making it tough for traditional stores, in some industries more than others. Books is unfortunately one where it's had a big impact - Amazon was one of the first to become a major online retailer YEARS ago, and it's only grown from there. Book Depository for example will ship books anywhere in the world from the UK with FREE SHIPPING, for about 30% under RRP. So tough market to be in.

    Re your online sales, you mention they are slow. This could be through one or a combination of two things - traffic or conversion. In simple terms this means not enough people are finding your site, OR people who do find it are not converting into sales. They are two very different problems, but in a lot of cases people will have both issues. Remember, 2% of site visitors actually purchasing would be considered pretty good, so you need a lot of traffic to get good sales. Are you getting good traffic? And where is it coming from? Search engines, social media, advertisements on other sites, your own mailing list, etc.

    If you ARE getting good traffic but they aren't converting into sales, you need to investigate this. Is it your prices are too high? Shipping costs too high? Website difficult to use? Range not wide enough or targeted enough? Not enough information/content on each book?

    You honestly do have a tough industry, and if you compare say Amazon, Fishpond, Book Depository etc, they have HUGE amounts of content and product offerings that are hard to beat. So you then need to decide if you want to try to - or perhaps you could become a specialist in a particular book niche, rather than doing a little of everything.

    If you want to discuss ways to try to improve your traffic or conversion please feel free to let me know.

    Hope this helps.
    Matt

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