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Buyers Drive The Process Online But The Lowest Price Isn't Always the Best
...... to have obvious advantages over bricks and mortar retailers. Traditional retailers need to spend $3 to $5 million to open a store. They usually can only pull from a 25 mile radius, meaning they need to make a fair margin. While online merchants can set up shop for less, and sell internationally, many have set prices so low that it is impossible for them to make a profit. Therefore, the good deals consumers now expect won't be sustainable over the long haul. Only the ones with the deepest pockets can hold out, and one begins to wonder why they would want to.
Retailers are dealing with online sales in different ways. Barnes & Noble made the mistake of not being first in their category to get online. Like so many other traditional merchants, they finally realized they could not afford to ignore the brand reinforcement of the Internet. Now they charge more for the same books in their bricks and mortar stores where overhead prohibits Amazon-like bargain prices. It seems they are betting that the instant gratification of talking to informed sales help and being immediately able to read a selected book in soft in-store chairs is worth a higher price. They may be right.
Meanwhile, like Amazon, a handful of online merchants realize that they need to emphasize superior service. Although low prices might bring a customer to a site, discounts along won't necessarily keep them there or get them to return. "We recognize we're a price leader, but we don't say to ourselves every day, 'Let's just slash and burn," says online electronics retailer NECX' director of operations Brian Marley. "I think it would be irresponsible for all of us just to compete on price, without doing the heavy lifting that goes into creating a value-added service," Marley told The New York Times.
One very innovative online approach comes from Fruit of the Loom, which provides not only its own t-shirts and underwear but also it competitors inside its e-commerce storefront. The company got 24 of the nation's top 30 t-shirt wholesalers in the $5 billion industry to commit to its electronic commerce platform. Fruit of the Loom provides consulting and software to t-shirt wholesales setting up online stores. The stores' customers then search for t-shirts from any number of manufacturers. Fruit of the Loom only demands that its products are the first replacement option offered when another company is out of stock. Online, a store that provides complete information from a variety of sources can be more valuable than a single site that provides only its own or partial information.
Analyzing Web Traffic=================================================== Analyzing Website Traffic =========== .....
NECX lets customers compare their prices to other stores on the same item. Customers were comparing prices anyway, they reasoned, why not help them. The result' NECX is losing customers but making money. Sales are up 20% even though the comparison engine is the site's most common point of departure.
Still, bricks and mortar merchants have the distinct advantage of giving customers what they want when they want it -- an experience that can supercede low price. Online shopping, no matter how pleasant, cannot (yet!) provide the immediate reward of buying something and then wearing or using it an hour later.
There is a long way to go before Internet commerce shakes out. At this point I'm betting that at end of the road the lowest price won't be the winner.
About the Author Jesus In WalesThe next few days were as hectic and exciting as any days Jesus could remember. The never-ending stream of people who wanted to meet him ..... B.L. Ochman http://www.thebestwebideas.com, is an award'winning marketer who has helped local, regional and multi'national corporations to increase awareness and sales of their products both online and off. Sign up for her marketing tips newsletter, What's Next Online, at Mailto:BLOchman@thebestwebideas.com.
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