Yes. I did make that up.
It is true that Internet Sales have reached 6% of all retail sales (excluding gasoline and food services).
For many retailers, it just feels like everyone is buying everything over the Internet.
If you are the owner or manager of Macy’s, Staples, Walmart, or Best Buy, you’re probably not using CRE (Cash Register Express) and probably have a multimillion dollar budget to capture more internet sales.
On the other hand, if you are one of the other 14 million smaller businesses, you worry about competition from Internet sales.
Some businesses, like convenience stores, don’t have to worry so much about the Internet. Most people buy from convenience stores because it’s…convenient. However, if you own a clothing store, you may lose a certain amount of your business to Internet competitors who may be more price competitive.
My advice is, don’t worry so much about competition from the Internet. Don’t use the Internet as an excuse for your failure to beat the competition.
Competition has always been out there.
Before the Internet, retailers had competition from Mail Order companies who were able to sell products at a substantial discount. Mail Order companies did not have to charge tax, had fewer employees, and didn’t have the expenses of a “real” retail business.
Retailers also had the larger discount sellers to compete with. There were John’s Bargain Stores, Korvettes, discount clothing stores, outlet stores, Costco and others.
Now, let’s look at this 6% figure. If you business is doing $500,000 per year, you are losing $30,000 to the Internet which comes down to more or less $15,000 per year in profits.
This is a lot of money for any retailer. However, if you weren’t losing it to the Internet, it would have gone to mail order businesses, discount retailers and other types of competitors.
How can you make up that loss?
Setting up your own Internet store has become pretty easy. Start selling on the Internet.
Offer more services.
Offer unique items that are not so easy to find on the Internet.
Be nicer to your customers!
A retail store has the advantage of allowing customers to see what they are buying, getting personal advice, and allowing customers to walk out with merchandise instantly.
According to the Harvard Business Review:
“The recent headlines about retailing are nothing if not provocative. “Shoppers Are Fleeing Physical Stores.” “The Great Mall Exodus.” “Macy’s Confronts the Crisis of the American Mall.” They seem to bolster Marc Andreessen’s prediction that by the end of this decade “retail guys are going to go out of business and e-commerce will become the place everyone buys.”
Regrettably, the scary articles completely miss the real story. And panicked retailers who get confused about what’s really happening will head off in dangerous directions.
Read the entire Harvard Business Review article at:
E-Commerce Is Not Eating Retail
Now, if you have decided to go heavily into Internet sales, read:
8-Ecommerce Mistakes that are Costing You Sales