While ecommerce has been around since the late ‘90s, online sales have grown phenomenally since then with consumers buying big-ticket items like computers, cars and even diamonds online. Does it pay to have a retail location anymore? Yes and no.
U.S. ecommerce sales for 2006 were $108.7 billion, up 25 percent from 2005 (U.S. Census Bureau). The Internet as a retail sales medium is gaining momentum as consumers research online to buy offline, saving time and energy.
Depending on the product/service category, it’s important for retailers to maintain both online and offline locations as consumer MOs migrate from clicks to mortar. However, some product categories can be easily marketed with an online presence alone.
Changing Business Model
Online shopping has changed the traditional retail business model for many product and service categories. It’s important to know what drives consumer choices. For instance, a consumer could spend time on Lowe’s Web site to research a home improvement buy but will likely purchase at the local store. S/he saves time and energy by doing pre-shopping online.
On the other hand, if a consumer wants a book or DVD, s/he will likely go ahead and buy online from Amazon, WalMart or Target. Why waste the time and hassle to drive to a local store for merchandise of that type?
In the case of Lowe’s, the Internet presence sets up the sale, and you get branding with that. For Lowe’s, the Internet is just one more way to attract sales. When it comes to items like books and DVDs, however, the availability of these items online can challenge the necessity of a storefront business – too easy to buy online and too expensive to maintain a physical storefront. That was the ingenuity of Amazon – ship from a warehouse where the rent is cheaper.
Using the Internet Effectively
It’s important for online retailers to use the Internet advantageously, from both the company’s and the consumer’s POV. Make the buying experience cost effective by keeping your shipping charges realistic. I bought a turquoise necklace on eBay recently, and the shipping charge was $5.00, which I thought was high. The necklace was skimpily wrapped, shipped in a jiffy bag, and came damaged. The seller lost the sale, and the return cost me money. I don’t trust eBay now; it’s just not reliable.
Online retailers can deliver goods and services cost-effectively from an online presence by providing quality and superior customer service. Product categories that require physical stores for offline purchase can offer options like in-store pickup, a no-brainer to keep shipping costs down. Think outside the box because you need a competitive advantage. It’s not easy to succeed online, but the rewards are great for savvy marketers.
I was insulted by your comments about e-bay in this article. You thought $5 was high to ship the item you purchased?
You, like so many consumers think services on e-bay should be free????
Obviously, you have done NO research on what it takes to have a store on e-bay. The shipping and handling charge of $5 you paid
also covers listing fees (auctions often cost the seller $.60 to over $1 even for small items), E-bay seller fees (5-10% of the item price),
and if you paid via PayPal – you can add another 5%-20% in payment processing fees, the actual cost of the packaging – padded
envelopes, boxes, bubble wrap, styrofoam packing, labels, printing, etc. as well as the actual cost of shipping the item. Even the USPS
postal service has recently had an increase.
And I haven’t even mentioned the monthly store fees an e-bay seller has to fork over.
So, for the record, the E-Bay market is not what it looks like from the outside. The profit margin for most sellers is very small with
alot of work to generate a small amount of income.
On the other hand, I’m sincerely sorry you had a bad experience on e-bay because it hurts all of us sellers when that happens and
you use this type of media to spread the word.
Just my opionion based on experience and FACTS.
Thank you!