Brick-And-Mortar Stores Must
Leverage Their Strengths

WAYNE RASH | Internet Week | June 12, 2000

The shopkeeper walked up behind me, demanding, "You're not just checking this out before ordering it on the Internet, are you?" I turned to see a powerfully built ex-Navy SEAL glaring at the snorkel. I asked about its features.

Then, as I handed him my credit card, I asked about the Internet. Is he really losing a lot of business? He thinks he is. I asked him if he'd considered moving into e-commerce himself, but further discussions made it clear: He didn't really know where to start or how to accomplish such a move.

This was not the first time I'd heard such sentiments from merchants in Northern Virginia, where I live. While searching for an Adcom home theater system and a new Sony Discman at the stereo store, the sales-person complained that there's no point in stocking the stuff, because people would look at it in the store, then buy it on the Internet.

Considering that this part of Virginia is a hotbed of Internet companies, including AOL, such responses seem odd.

Are brick-and-mortar stores really being threatened by e-commerce? Are we heading for a world in which retail will exist mostly online? I called a few other merchants and asked. One, a used-books dealer, said the Internet is helping his business flourish. There's a centralized search service called Bookradar.com that can search the inventories of dozens of used-books dealers, enabling someone to order a book from wherever it resides. The dealers are all brick-and-mortar stores that also sell online. They've done so to provide better service and selection.

Clearly, it's possible for brick-and-mortar businesses to coexist with e-businesses. So why do many businesses feel that the Internet is a form of unfair competition? Is it that the Internet can provide products that are better, cheaper or delivered more quickly? The answer is "no" for the most part. You can save money online, but frequently the savings are eaten up in shipping charges. And the Internet won't get you a product more quickly than simply picking it up at the store.

So why the concern? The Internet, because of the broad choices that are available, gives the customer more respect. When I went to the stereo store, I was told to check the store's other locations for availability, which meant spending hours in traffic. Was I being shown any respect?

In the past, if you had a shopkeeper who didn't provide good service, you either went to a different shop or you learned to live with it. Now, with the Internet and e-commerce, you have choices. If you don't like one commerce site, you can go to another without effort. If you don't like your local merchant, you can go to the Internet, where other options are just a few clicks away.

But what many local merchants don't seem to grasp is that they have the edge on delivery. They also give customers the ability to touch and feel the product. In addition, if they give their customers compelling reasons to shop with them (service and selection, for example) rather than on the Internet, their customers will stay.

But they can't survive by fighting the Internet. They need to find ways to embrace it, just as the used-books dealers have done.

Wayne Rash is managing editor/technology.