It's hard to take on the big boys
Is the internet killing retail? This has been a huge question that continues to run around marketing and business circles. Even the President is asking this question. The common theory goes something like this; people come to retail establishments to browse and look at the product but go home and cruise the internet to find the best price. The consumer subsequently orders on-line thereby finding the best prices and potentially avoiding sales tax. Many on-line sellers have free shipping with minimum orders, so the shipping cost becomes moot.
Best Buy has announced the closing of 50 of their stores and we all know about the slow and painful death of
The electronics gadget industry is a prime example of finding what you want in
a store and then buying it on-line. But is buying something from one guy based
solely on price a good idea? I’m not knocking on-line retailers, but I’m never
sure if the best price is really the best deal. Besides, if Best Buy disappears
where will you go to look at electronics? Circuit City
Are they too old fashioned to earn your business?
Buying something based solely on price shifts all the business to the company that can offer the lowest price. The real question becomes, how can they offer a price that is substantially lower than their competitors? This company must be purchasing from a wholesalers at substantially lower prices in order to offer their bargains. They maybe purchasing large quantities and receiving discounts. This is good for the company as they can corner the market on supply while offering lower prices to consumers. But what if they are cutting a corner somewhere else? If their price from the wholesaler is good but not that good, the company in question can be reducing their customer service or quality control in order to be the lowest price on the market. How many times have you received a product in the mail that didn’t work? Even once is too much.
Just as there are “Mom & Pop” retail stores on
Main Street, there
are “Mom & Pop” stores on the internet. These small internet retailers get
good pricing through their wholesalers but they don’t buy in massive quantities
so it’s probably not as good as the big boys. What “Mom & Pop” stores offer
is customer service. They personally check the merchandise before it goes out. They
handle each sale and follow it through. If you have a question, usually one
person answers it and helps you with your decision. If retail becomes based
solely on price, soon we will only have one choice. The guy with the lowest
price becomes your only choice, because he will shove everyone else out of the market, kind of like what
the internet did to . Circuit