Home – New Forums Starting your journey Is bricks & mortar retail a thing of the past in 2013?

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  • #1130085
    Rico
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    Personally I think that who is suffering more from the internet shopping trend is the big chain, and the small B&M shop is going to be the winner.

    Think about it… A large shop is organised like a web site. You have different categories of products to browse (eg. Baby section, bedding, toys, outdoors, etc.) and you have virtually zero contact with the staff. The difference is that a B&M store, even the largest one, will never be able to compete with prices and ranges you can find online. Also the cost of fuel, time in the traffic, parking, etc is almost always more than the shipping costs you’d be charged shopping on line, in your house. And when you had a long day at work, it is such a more appealing option to buy things from home, maybe after dinner having a cold one!

    The B&M shop that will survive is the one offering services you cannot have online. The small manicure shop, the outdoor shop with competent staff ensuring the best fitting for your hiking shoes or backpack, the farmer’s shop selling their own made products, the market stall making temporary tattoos, the hairdressers, the art galleries, etc.

    #1130086
    Divert To Mobile
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    My friends who own B&M have expressed the following frustration.

    A customer who comes in and spends 30 – 45 min on consultation with the sales staff to deterimine what is the best product solution for their situation, then goes online to price it and then calls back asking for a price match or to beat the online shop.

    This attitude is hurting B&M

    Steve

    #1130087
    Steve_Minshall
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    The fundamental question for any business is: “what can I offer that is difficult for most other would-be competitors to offer?”.

    While setting up an on line store is easy, satisfying the above on line is much harder unless you have a unique product or truck loads of cash.

    A B&M store on the other hand will always be able to offer personal service in a specific location as a competitive advantage. The only way this can be really countered by the competition is to set up their own B&M store in that proximity.

    My B&M store was opened nearly 10 years ago. I have never really embraced on line sales for the following reasons:

    1. For a small business to be successful you need to specialise. By the very nature of a specialist business customer’s need help with the details to help them choose. You can put all you like on a web site but only a small percentage of the population study rather skim content on line. Sure you can try and add electronic assistants on line but I have used them and not been impressed and now you are eating into the theoretical cost savings of online.

    2. Dealing with issues at a distance can absorb a huge amount of time on the phone. Trying to actually understand the problem to start with is harder than just getting someone to return to the store.

    3. Couriers have been very disappointing. I have had goods lost (signed for by a scrawl and a first name), I have had goods destroyed. I have had to pay hundreds$ to re-send the goods. The couriers show no responsibility.

    I am really well placed to move product on-line. My website is by far the most dominant on-line in the Sydney market for my niche, with 25000+ hits a month. I do next to no PPC because my organic ranking works so well. Yet the frustration I have had from selling goods at a distance has held me back. I could sell simple products on line that will be easier but then I fail on my fundamental competitive advantage and just compete on price with the consequence of having to lower my store prices to match.

    I have spent 10 years studying on-line marketing and I have the following conclusions:

    • Setting up an on-line store is easy that does not mean selling on line is easy
    • Beware the BS. “Successful” online business are much more ready to quote turn-over than return on investment.
    • Selling on line isn’t cheap. “Catch of the Day” is running on a mere $80M investment so don’t use this type of business as a case study unless you want a similar VC sponsored entity. My B&M business was set up with a since paid back, $28k investment. Obviously different league but this is a small biz forum.
    • Don’t underestimate the burden of returned goods which will have damaged packaging, lost and wrongly ordered goods, confused customers.
    • Unless you compete on price it is very hard to get a competitive advantage.

    I have been to several conferences on online selling and online marketing and of all the people I have listened to the most relevant in terms of a profitable online/B&M business that has not lost what is special about a small business are these guys.

    #1130088
    MatthewKeath
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    Steve_Minshall, post: 147735 wrote:
    The fundamental question for any business is: “what can I offer that is difficult for most other would-be competitors to offer?”.

    While setting up an on line store is easy, satisfying the above on line is much harder unless you have a unique product or truck loads of cash.

    A B&M store on the other hand will always be able to offer personal service in a specific location as a competitive advantage. The only way this can be really countered by the competition is to set up their own B&M store in that proximity.

    My B&M store was opened nearly 10 years ago. I have never really embraced on line sales for the following reasons:

    1. For a small business to be successful you need to specialise. By the very nature of a specialist business customer’s need help with the details to help them choose. You can put all you like on a web site but only a small percentage of the population study rather skim content on line. Sure you can try and add electronic assistants on line but I have used them and not been impressed and now you are eating into the theoretical cost savings of online.

    2. Dealing with issues at a distance can absorb a huge amount of time on the phone. Trying to actually understand the problem to start with is harder than just getting someone to return to the store.

    3. Couriers have been very disappointing. I have had goods lost (signed for by a scrawl and a first name), I have had goods destroyed. I have had to pay hundreds$ to re-send the goods. The couriers show no responsibility.

    I am really well placed to move product on-line. My website is by far the most dominant on-line in the Sydney market for my niche, with 25000+ hits a month. I do next to no PPC because my organic ranking works so well. Yet the frustration I have had from selling goods at a distance has held me back. I could sell simple products on line that will be easier but then I fail on my fundamental competitive advantage and just compete on price with the consequence of having to lower my store prices to match.

    I have spent 10 years studying on-line marketing and I have the following conclusions:

    • Setting up an on-line store is easy that does not mean selling on line is easy
    • Beware the BS. “Successful” online business are much more ready to quote turn-over than return on investment.
    • Selling on line isn’t cheap. “Catch of the Day” is running on a mere $80M investment so don’t use this type of business as a case study unless you want a similar VC sponsored entity. My B&M business was set up with a since paid back, $28k investment. Obviously different league but this is a small biz forum.
    • Don’t underestimate the burden of returned goods which will have damaged packaging, lost and wrongly ordered goods, confused customers.
    • Unless you compete on price it is very hard to get a competitive advantage.

    I have been to several conferences on online selling and online marketing and of all the people I have listened to the most relevant in terms of a profitable online/B&M business that has not lost what is special about a small business are these guys.Interesting comments Steve.

    I think a lot could come down to your industry.

    The clothes store you mention as an example is in a lot better position product wise to be a success online.

    #1130089
    Zava Design
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    Rico, post: 147729 wrote:
    Think about it… A large shop is organised like a web site. You have different categories of products to browse (eg. Baby section, bedding, toys, outdoors, etc.) and you have virtually zero contact with the staff.
    Much prefer clothes shopping in a large store where staff just leave me alone. Hate walking into smaller stores and the first thing is someone in my face saying, “Hi, how are you, how can I help you?”

    Well, first thing, you can just leave me alone to look at your goods!

    #1130090
    MatthewKeath
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    Divert To Mobile, post: 147733 wrote:
    My friends who own B&M have expressed the following frustration.

    A customer who comes in and spends 30 – 45 min on consultation with the sales staff to deterimine what is the best product solution for their situation, then goes online to price it and then calls back asking for a price match or to beat the online shop.

    This attitude is hurting B&M

    SteveI understand the frustration from business owners, but I think this has been happening even before online make it even easier.

    I know when shopping for a particular product that is sold in many places, I have always gone to look at it in a store, then call around other stores to see if I can get a better price. I did this before in the internet.

    If I can find the exact some product somewhere cheaper, then I will be buying the cheaper product. This is Harvey Norman’s gripe. They think we should pay a premium for no reason other than keeping their fat profit margins. That type of retail is slowly dying, and it’s the number one reason why online stores have been able to lure shoppers away.

    As it’s been mentioned before, if shopkeepers are selling the same products 50% more expensive than someone else, unless they give the shopper a really good reason to buy from them they will find the going hard.

    Some examples:

    1. Crumpler. The bag store has the same prices online and offline. They don’t allow other retailers to discount their products. They don’t care where you buy because the price is always the same.

    2. Apple. Same with Apple, although many retailer sell their products, the price will only vary by a very small amount. So they too don’t care where you buy it as they make their cash.

    In both these stores the customer service is amazing and the product is high quality.

    #1130091
    MatthewKeath
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    Zava Design, post: 147756 wrote:
    Much prefer clothes shopping in a large store where staff just leave me alone. Hate walking into smaller stores and the first thing is someone in my face saying, “Hi, how are you, how can I help you?”

    Well, first thing, you can just leave me alone to look at your goods!I’m the opposite, I like being acknowledged. I say ‘Just browsing’ and they leave me alone.

    #1130092
    Anonymous
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    Steve’s comment on this post really caught my attention. Below are some of the points:

    • Doing online business is very competitive as you don’t have any distinctions between you and the next best alternatives. Hence, it most likely result in a price war which is not good for anyone (except the buyers).
      Perhaps a B&M bolt on to an online store would help give your online store an edge over the other online only setup vise versa. This was sort of what Jason had hinted in his earlier post.

      The next question here is about the pricing between your online and your B&M store? Do you price it to be competitive for online or for B&M? Mathew’s example of a single price model is interesting and this is also reflected in the Birdsnest store that Steve has reference.

    • Overheads and risks of running online business are not mentioned widely.
      Perhaps this overheads are indeed too high for B&M store owners. The experience and know how to run a successful online business does not come easy. Hence, for B&M retailers to move towards a prdominently online setup is a major gear shift with steep learning curve.

      Is an online product listing setup without ecommerce selling all is required for existing B&M store in the 21st century?

    #1130093
    Jenny Spring
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    I have some B&M (coaching) customers, and some online (business) customers.

    My B&M customers are killing it and it is because they are doing everything right.

    they know their ideal customer
    they listen to them nicely
    they ask them what they want nicely
    they give it to them nicely

    It isn’t complicated.

    Bad service, lack of understanding about how the customer is and how to look after them, is what is at the heart of the demise of so many businesses.

    Jenny
    http://www.springintosales.com

    #1130094
    Solly
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    Advertising online to lead customers to your offline market..

    #1130095
    Anonymous
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    Taking from Jenny and Solly’s comments. Existing B&M retailers should also:

    • Focus on their point of difference – Quality Customer Service
    • Find/setup Online/Mobile presence for their store to drive people to their stop.

    This certainly sounds like a less daunting tasks then to drop what you know and plunge into an full fledge online business foregoing the advantage of B&M.

    From all our valuable comments this far it seems, even the most successful online business requires a B&M presence to have a point of distinction in the online world.

    There are many options for online/mobile presence these days. Hence, it is not necessary as a start to go into full fledge development of your website/ecommerce…etc. You can leverage off existing companies like eBay, Gumtree and many more for your initial online presence with focus on giving your business more exposure in the online world.

    #1130096
    Eng UNG
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    The real problem with B&M is their service, or lack thereof. Big business seems to be all about cutting costs & getting more efficient – particularly with big stores and franchise businesses.

    I shop online because B&M is so mechanical that they don’t inspire any loyalty from me. And if I do shop, I generally shop for value, not because I’m a loyal customer.

    #1130097
    LisaK
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    Brick & Mortar businesses in the most part are having a hard time. But it is by not no means the end to the Brick & Mortar retail outlet.

    The main problem I have found (when dealing with clients who have B&M businesses) is their lack of understanding of how the internet and technology can not only help them with their B&M business but also significantly reduce their costs.

    The times of setting up shop in your local area and selling something different to everyone else in the area and expecting it to survive based on that are gone.

    The key is, to use internet marketing techniques to reach your customers both online and off line.

    These days someone is likely to research online for the best products and price but more often then not they will then buy off line at a local store. That way they get the service they require and can ask questions face to face.

    #1130098
    Jenny Spring
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    MatthewKeath, post: 147762 wrote:
    I’m the opposite, I like being acknowledged. I say ‘Just browsing’ and they leave me alone.

    Matthew – I’m glad you said that about being acknowledged.

    In fact most people want to be acknowledged. The opposite of that is being ignored.

    I remind my B&M customers that you might as well sing out — “Are you happy being ignored?” — if you aren’t going to assist.

    It is the customer’s right to say — hey, I’m happy browsing. But at least give them the chance to say that, rather than assume that no-one wants service anymore.

    #1130099
    Jenny Spring
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    LisaK, post: 148525 wrote:
    Brick & Mortar businesses in the most part are having a hard time. But it is by not no means the end to the Brick & Mortar retail outlet.

    The main problem I have found (when dealing with clients who have B&M businesses) is their lack of understanding of how the internet and technology can not only help them with their B&M business but also significantly reduce their costs.

    The times of setting up shop in your local area and selling something different to everyone else in the area and expecting it to survive based on that are gone.

    The key is, to use internet marketing techniques to reach your customers both online and off line.

    These days someone is likely to research online for the best products and price but more often then not they will then buy off line at a local store. That way they get the service they require and can ask questions face to face.

    Lisa — yes I agree. Although you are already working with someone who has chosen a traditional approach, yes? B&M.

    Moving them to online is a struggle on more than one front. Firstly, they want to accuse online sites of taking away their business, but they don’t want to go online because they are ? ________ (fill in the blank). Afraid? Ignorant? Foolhardy?

    I’m a sales business consultant, and I have just worked with a retail shop to get them up and online (I refer my customers out to specialists). The thing that was challenging with my client was her understanding of who her customer truly is, and then how to find them online. She thought she would open an online presence and then everyone would find her.

    The key is — WHO is your ideal client. HOW do you attract them. WHERE do they hang out?

    Online is awesome, but it is done soooo badly!

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