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eCommerce sites will replace many stores
November 2012

A while ago I wrote a short article titled: “eCommerce: Will online retail replace the in-store experience?” and I was fascinated by the amount of people who completely disagreed with me, stating that people would always prefer shopping for the real thing over the ease of doing the same thing online. Therefore I decided to elaborate a bit more on the same question.

eCommerce sites will replace many stores

To my idea society is still in a transition, with a lot of people not fully realizing what opportunity the Internet is offering them. For decades large corporations decided through mass-marketing and mass-production what the consumer needed to buy. However, the Internet offers small business the opportunity to offer niche products to a customer base worldwide and thus reach a substantial sized niche audience. Store based businesses can only carry as many products as fit in the building, but only those products for which there are enough people in the "neighbourhood" who are willing to buy those specific products. Thus an average store can carry about 50,000 products.

Stores cannot keep as much stock as eCommmerce sites

Internet based companies on the other hand can carry millions of products that they either store in large warehouses, or just order whenever they get an order themselves. Or they can carry very specific niche products for which there are not enough customers in their immediate neighbourhood, but which they can sell to a much larger customer base worldwide.

Book and music companies show this clearly. A book shop can offer around 50.000 books. Amazon can offer millions. And although even on Amazon the most popular 50,000 books are sold way more often than (in rank of popularity) the 1 millionth book, all those books in the rank from 50,001 to 1 million form a large chunk of Amazon's sales. This allows people to find books that cannot be found in a normal book store. You might try a specialty book store, but those will not be present in every town and village. As an extra advantage, the online store knows exactly who you are, what you like and is able to personalize its online advertising for every single customer. This means that every customer only gets to see those ads that he or she is truly interested in. With more than a million items in stock, that is actually a great thing.

And that is why I like to buy at Amazon and no longer go to book stores, because Amazon carries the kind of books I do not find in the corner shop and Amazon shows me the right similar books that fit my taste, without spamming me with boring advertisements about products I do not want at moments I am only irritated to see those ads. Yes, that is right I mean television ads. And talking about the corner shop: if it is a book or music I am looking for, then I need to travel 70km to the next city at the moment, because there is no reasonable store in my vicinity any longer.

Books or furniture: it is all the same

I know, I am talking about books and music again and not about cars or furniture. But that is only because books and music make for such a clear example to show my point, but in the end with furniture it is exactly the same thing. Why would I go to a furniture shop to see a small selection of furniture chosen for me by the shop manager? Maybe the shop manager bases the selection on what most people like, but again, those are only the people in the “neighbourhood” or in case of furniture even in the city. But does that mean that I need to buy a couch other people like better? No of course not and the Internet enables me to make my own choices not determined by the majority in my city and not determined by the mass-marketing of large corporations.

I do understand that at this moment in time people are completely used to visiting the furniture store where they are able to touch and try their new couch before buying it. Right now people are afraid that a couch from another country, they have only seen on a screen, is not going to be what they expected, or is not going to sit that nice. And yes that is a concern, but with the further development and use of social media, I will not only see the furniture on screen, but I will also have the reviews from friends and other social contacts. Many people already choose a hotel for their holiday, by comparing reviews on Trip advisor; a choice just as costly and important as a piece of furniture. Soon we will get used to choose our furniture based on the same reviews.

The Internet is allowing us to make more personal choices with everything we buy and will allow us to buy products that we love but are too much niche products too be able to be sold in normal stores. It will take some time and stores will probably not disappear completely, but to my idea a lot of stores will not be able to compete with eCommerce sites and will disappear, just like book stores have disappeared already.

I am highly interested to hear why you do not agree with the above.

 

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  CASE STUDIES
Some examples of social media and social media marketing campaigns that caught my attention:

Old Spice case studyOld Spice: a great social media campaign that fizzled out
Old Spice managed to turn “your grandfather’s” kind of product into a really sexy brand, but instead of nurturing and growing the great relationships they created with their followers, they abandoned them
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