Re: UKNM: retail conflicts

[Ray Taylor]

Tim Moore [SMTP:

Tim [dot] Moorestartle [dot] com

] said:


> it may be a dumb question, but this being the the case, how do the large

> consumer brands justify thier consumer facing web presences.  do they:

> monetise thier presences in some way; use thier web presence to reduce

cost;

> justify the web budget by scarng the ceo to appove it because if he

dosen't

> then they'll look like stoneage cheapskates?


Pre-web the same situation applied. Some brands sold direct as well as

through retailers, others did not. There has always been a degree of tension

between some brands and their retailers when they do sell direct. The web

changes nothing here.


If a brand, in creating a direct sales channel via the web, increases

competition with its retailers, then clearly there is a danger of increased

tension with the retailer. Justification of such a move will depend upon the

circumstances. Equally, any potential negative effect on trade outlets

should be taken in context. But anyone who believes that the web (in its

present form) will displace all other channels is deluding themselves.


Creating a web channel increases the number of sales channels (by one, for

the numerically challenged). And the web, like other channels, has its own

strengths and weaknesses. The rules of competition will dictate the extent

to which any single channel prospers or does not prosper in relation to any

other. Any you can, as Aidan suggests, use web to support in-store sales.


A good high-street retailer, in a popular high street, who provides

excellent customer service, and is able to contain overhead cost, etc, is

just as likely to prosper as a brand selling products direct on the web.

However, regardless of whether or not the high-street retail model works,

any retailer who does not consider adopting a web channel should consider

instead the benefits of retirement.


Brands often retail, retailers often sell direct, brands sold direct compete

with the same brands sold retail. What works best is excellent customer

service. Price is a marketing issue. For instance, several of the biggest

retailers such as Dixons talk to the public about best prices when in fact

their prices are among the highest. Their customers believe they are getting

a good deal. Comet has the clearest "pile 'em high, sell 'em cheap" policy,

but this would count for nothing if their in-store merchandising and

sales/service offering was not up to scratch.


Retail is retail is retail. The sooner the web startups start to learn this,

the more likely they are to be in with a chance of competing with the

established retailers. Right now, the web shops (with one or two exceptions

such as Amazon) are failing to make any inroads into traditional retail.


Retail business is facing an extended period of fundamental change, the

start of which predates the web. How it comes out, only time will tell. One

of the few rules that seems to be enduring in the short term is that

customers favour a flexible multiple-channel model. If there is any single

consumer who only uses only a single channel to acquire goods, I would like

to know his or her name.


Ray Taylor

Me and my colleagues at eyeconomy have just moved office to a jolly nice

building in the heart of the City of London. So if you ever have reason to

contact us by any means other than electronic, you might like to note the

details (including map and aerial photos kindly supplied by the wonderful

www.multimap.com) at www.eyeconomy.com/contact.htm




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