Is internet killing the traditional store?

[Snakeman]

OK, here's my take as one who does reptile shows (Snakebusters - Australia's best reptiles).
As industry leader, most of our work is both repeat business and word of mouth.
People need to find us and at the present time "google" is how they do it.
So we need a website.
Contact number on the site is a good start!
However there are always "start ups" and in our business, some would sell their mum for a buck of they could.
So they bootleg our IP, trademarks, images, the lot and then pass off as us.
So we have to monitor the web and keep abreast of the bootleggers and shut them down as fast as they set up.
Also a lot of people like to do their investigation of our business and others like us (the legit ones) on the web as there are no high pressure sales people to deal with.
In summary, we need a decent web presence to allow for comparison shopping, even though we see ourselves as bricks and mortar.
All the best
Snakeman Raymond Hoser
http://www.snakebusters.com.au

[wordsforwebsites]

The question of whether to shut up shop and just go online is become a reality for many businesses. The local lingerie shop closed up after 10 years because the landlord put the rent up. The issue was whether women would buy bras online without first trying them on. But they did mass free fittings, logged all our details onto the computer and asked regulars to also list their favourite brands. They operate out of a warehouse, reduced their prices, increased their margins and kept all their staff.

I struggle to think of businesses that truely need a shop - a few come to mind, like dentists and mechanics but mostly you can buy over the net and have it delivered.

The days when the online shop was seen as a poor cousin are almost over.

[bigdipper]

It won't kill them totally as online doesn't suit all products (as some people have already mentioned) as for some products you have to look and touch before purchase.

Plus a lot of people go shopping as a leisure experience and social activity. They catch up with people for a coffeee and then browse the shops or go to the movies and then look at shops etc.

So yes it will effect the traditional shop but won't kill them off entirely.

[4N_Man]

Hi, while not being in retail I have several friends who are. They are located in small towns therefore their stock & turnover is limited. What they have done is focus on their strength/greatest interest and go online, thus giving them a national marketplace. One started with motorcycling gear which he sold small amounts of but was really interested in and now he does most of his sales online and this has enabled him to broaden his physical store. Another person I know sells knitwear, it is seasonal so now she can market internationally in our off-season. I don't think it is one or the other, rather seeing online as an oportunity to expand, a physical store gives a measure of creditability. For an example of a brilliant success story of online competing against offline in the Sydney market have a look at http://www.cellbikes.com.au - these guys have been immensely successful in a traditional market & I think having an offline store is a neccesity for them. FYI I have nothing to do with them apart from being a happy customer. Cheers

[NSA]

I have been retailing for over 20 years with physical stores and we opened one of the first online Golf Shops in Australia. www.justgolf.com.au

I have seen internet sales grow for our business, but the amount of online competitors has grown more, so it is getting harder to compete online. I see the main threat to retailers as the "garage based Ebayers" that buy and sell online. These sellers account for a considerable percentage of online sales and in most cases avoid expenses that "genuine" retailers have such as tax, rent, workers comp, insurance etc. These costs have to be passed on to buyers, but the "garage" businesses are avoiding this.

In the end, the comsumers will determine which form of retailing survives. They might be buying online at the moment and price shopping, but once they have a few bad experiences online, they may move back to bricks and mortor, or at least online shopping with known retailers.

Personally, I have decided to close my physical store and go back to online retailing only, so I can reduce overheads, but I will have the advantage of trading with a name that has been involved in retailing for over 25 years.

It will be interesting to see what the years ahead hold, but I can't see traditional retail dying all together. I think smart retailers will continue to utilize both methods of distribution.

The journey for me is now going full circle. Over the years a lot of my fellow retailers asked me to build online stores for them and now what started as a side line, has now grown to a full time business. So early next year when I close my physical store I will be offering web services for online retailing and marketing. You can check out my new business at www.Solutions4.Biz

If you can't beat them, join them!

[King]

Excellent review NSA!

I think the challenge is we just don't know what retailing will be like in 10 or 20 years.

Who would have imagined 20 years ago, when the internet was kicking off but the www was just about to emerge, the billions of $ in trade that this new technology would generate.= Let alone the medium for people to act on known or previously unknown talents).

MAYBE the 'garagers' are the way of he future - new niches for middle-men in the electronic world. I agree that they are really opportunists, but for any niche, there is always someone willing to fill it.

Your move into web development is very logical. Especially when you look at some of the world's biggest transport companies now making more money my applying their expertise in the form of consulting and managing than they do shifting physical goods. Good on you for recognising and applying that new 'product'!

[Ding Duck]

It is interesting that you discuss travel booked online and booked through a store. My experience shows that to get what is required, you have to do your own research and then go to the store to get what you want. Two examples of online vs store.

The first one was a trip to Odessa, Ukraine that was being looked at. Preference was to use MH to Istanbul, then local airline to Odessa. Price quoted for round trip, business class, $15,500. By doing via a shop, that was dropped to $6850.

The second one was a trip to Canton, China. Went to one of the big name travel agents, shop in every shopping centre, and they told me that MH only fly to Hong Kong, not Canton. A search on the airline website showed that they do fly to Canton... Agent in shopping centre was on a mission to fill planes to Hong Kong, and could not care about what the customer wanted!!!

So, from what I have seen, there is a use for online, but there is still a demand for the bricks and mortar shop, especially in the travel industry!

Ding.

[4N_Man]

There is a problem with the original question about online vs. offline in that a rocking, well marketed web store will likely out sell a tired un-marketed bricks and mortar store, in any industry. I know a few retaillers moaning that online didn't work for them but that is because they did it wrong from the start and if they went about setting up a physical store in a cheap ad-hoc manner it would likely fail too. Having sold ecommerce websites for awhile there are a few common mistakes I noticed people kept making that I though some FS members might be interested in;

1. Function over Form - put your money into function over form, pretty design looks nice but does not sell. Use a good CMS (content management system) that makes it easy to change stock and so forth

2. Use a professional - ok so your nephew did a course at TAFE and will knock up a site for you for $200 - you will get what you pay for. If you want to sell you need a quality 'backend' (that's the 'mechanics' running underneath the site).

3. Build smart with sales in mind - the whole purpose of your site should be to lead the visitor to purchase your goods so the layout, wording and so forth need to be produced with this in mind. Don't get hung up on presentation etc unless it will make more sales.

4. Go all out or not at all - my opinion is do it properly from the start. Treat your web store as a 'real' store, commit to doing it well & making it work. So, give it a decent budget, set a time frame and have an opening that you are proud of. Don't have a 'we'll do a bit at a time and see what happens' attitude. You wouldn't open a physical store where things didn't work & were incomplete, you would make sure it was 100% then open (mostly) do the same with your estore or just do a couple of 'landing pages' that point to your physical store.

5. Market, Market Market - marketing an estore requires a lot of money OR a lot of work. You can pay people to get your site ranked high in Google searches or you can do the work yourself which is unwise unless you know what you are doing and have time on your hands. You need to have blogs and do the stuff that makes Google stand up and take notice otherwise you won't get the traffic and won't get the sales- it is that simple (unless you just sell on eBay or similar). Don't spend a lot of money on your site and have nothing left to market it. Consider Facebook advertising rather than Google - personally I think it is more effective as it can target your customer profiles directly. Some people are being very clever and e-marketing themselves with a 1 page profile which links to their store - cheaper, easier and more manageable for the increasing number of people using handheld devices (iPhones etc) to do their searches.

So in summary, treat an estore like a real physical store. Don't try and develop it as a hobby, do it full on. If you have a really good site you can use it to do a lot of your admin and get a lot of metrics from it. There is a guy in New Zealand who can even integrate an Accountancy program (MoneyWorks) into your webstore for a very reasonable price so it does everything for you - tracks stock, sales, visits etc. Usually you need to enter web data into your accounts package seperately.

I appreciate there is a lot of information and detail left out of my points but you need to do your research and find people you trust to work with and can deliver sales results. There is a a lot of science in developing 'sites that sell' so don't just go with people who build pretty sites, go with someone who can show you businesses who have grown from thier websites. You can negotiate, a friend of my had an SEO guy ring and said he could get his site at the top of page 1 of a Google organic search for his key words within a month. My friend engaged him on the basis that if he could do that he would pay an agreed fee for 12 months. He did, why wouldn't he? it was a win-win.

I don't sell sites or anything now but am happy to share my knowledge & experience if anyone has questions etc. Personally I don't understand why anyone wouldn't want to capture the rapidly increasing online market.

Good luck whatever your method of trade.

[slh]

I'm in the process of taking my consulting business online.

The internet has brought about huge changes in how people work and play, and the changes aren't stopping. The fact is that if businesses don't adapt to the changing conditions, they will go the way of the dodo.

That doesn't mean the end of the physical store. But the new competitive threat that it poses means that there have to be changes in the physical store business model to meet the changing expectations of the consumer. At the end of the day, it is all about the customer.

Customer service - whether online or offline - is core. Most of the majors have been able to get away with appalling service, or more accurately, NO service at all. Adding 10% (ie GST) to cost of purchases online (a nonsensical protectionist cry) isn't going to make any difference. Exchange rates fluctuations have always been a business risk : all that has happened is that the time frames have shortened.

The real issue is willingness to adapt the bs model to changing times and responsiveness to customers needs. Technology can actually be the SME's friend. Lots of examples of this. I listed some books to kick off thinking about innovation in bs strategies in my latest newsletter. Go to www.in-contextfinance.com.au/publications.asp

[travelmaster]

Agent in shopping centre was on a mission to fill planes to Hong Kong, and could not care about what the customer wanted!!!

So, from what I have seen, there is a use for online, but there is still a demand for the bricks and mortar shop, especially in the travel industry!

Ding.

You couldn't be more right Ding than that. I'll also add that the chances are the agent had no idea what's the difference between Canton and Hong Kong and was more on a mission to make his/hers monthly budget or otherwise no food on the table. It's a sad fact but that's how the big chains operate.