Is Brick and Mortar A Passing Fad?

Q: Is the online world the best place to sell a product or service these days? My friends seem to think that brick and mortar stores will totally disappear in the future. I debate this all the time with them, but it seems to be heading that way. Your thoughts? - Alex H.

At last report, Alex, Sam Walton was still resting comfortably in his discounted grave, so I'd say brick and mortar is safe, at least for the next few years.

During the dot-com boom the mantra was "Brick and mortar is dead!" Then when most of the dot-com's crashed like an elephant sitting on a wicker chair, the mantra suddenly changed back to "The Internet is dead! Long live brick and mortar!"

In both instances those doing the shouting were dead wrong (and highly annoying). The correct mantra should be "Long live ecommerce enabled brick and mortar!" It's not as catchy, but a lot more accurate.

So to formally answer your question, Alex: I have to agree with you: brick and mortar is safe for many years to come. That's not to say that online selling will not continue to grow and overshadow in store sales in the coming years. But smart retailers realize the potential - and limitations - of the internet and are making plans accordingly.

Smart retailers know that while the Internet has the potential of opening up new sales channels for them, they also know that not all customers will shop online, at least for another generation or two. Until every man, woman, and child on the planet can operate a computer as easily as a cellphone, there will always be consumers who will not buy online.

Smart retailers also understand that a successful online strategy depends on the mindset of the buying public. They understand that the internet is not erasing business models: it is changing business models. Those that adapt will succeed, those that do not, will one day close their doors.

When Amazon.com burst onto the scene with big plans to change the way people buy books, Barnes and Nobles did not close their brick and mortar stores out of fright. They also did not ignore the trend toward online shopping. Instead they directed resources toward building their own online sales arm to compete in the online marketplace.

Many large retailers that were slow to jump on the online shopping bandwagon are now getting serious about online sales. They are using the Web to launch new product lines and sell things you normally would not find in their stores. Wal-Mart for example, sells products online that would be too pricy for their retail stores, like $6,000 plasma TVs and expensive sports memorabilia.

Setting up an online shop is also cheaper than ever before. A web store that would have cost hundreds of thousands of dollars just a few years ago can now be built for less than $10,000. Online retailers can also stock more items than brick and mortar stores that only have so much shelf space.

As more consumers have access to broadband you will continue to see a rise in online shopping and a rise in the number of companies setting up online points of sale. One example is Sears.com, which saw online revenues skyrocket 40% in the past year. Forrester Research says US online sales will hit $145 billion in 2005, which translates to 7% of US retail sales. That's a 26% rise in 2 years.

Wal-Mart will no doubt have a big effect on online sales as they bring their "lower prices everyday" mentality to the Web. Just as they muscled suppliers for the lowest prices in their stores, so will they bring their weight to bear online. This is great news for consumers. As more retailers go online consumers will have more choices and find lower prices.

One thing that may ensure that some brick and mortars never go away is what I call "The Try It On Factor." If you have to try it on or want to see how you look in it, there will always be a need for brick and mortar stores. For example, I wear cowboy boots (I have a pointed foot) and I would never buy a pair of cowboy boots without trying them on first, so until some genius comes out with a way for me to hold my big foot up to the computer monitor and get a perfect fit, I will only buy my boots in the store.

I do believe that someday the majority of products will be purchased online. We are already seeing this trend in many industries. DVDs, CDs, videotapes (which will definitely go the way of vinyl records in a couple of years), books, cellphones, televisions, computers, stereos, etc. are all big sellers online. It's also possible to buy a car from the comfort of home and shop for a house. I know because I've done them both several times.

When debating the death of brick and mortar you must also consider the fact that shopping is a social experience for many consumers, i.e. females, who happen to control the purse strings and make most of the buying decisions for their families.

Case in point: Every year my wife and her mother trek to Birmingham and Atlanta for annual shopping trips. When I point out that there are perfectly good malls right here in our own backyard, I am told that I'm missing the point. The point of these trips is not to buy anything. The point is to shop, to eat, to hang out, to bond. If a purchase is made, oh well. Scientific studies on these phenomena have concluded that "It's a girl thing?"

For men, shopping is a chore. For women, shopping is an experience. So until my wife and mother-in-law can get the same satisfaction sitting in front of a computer monitor as they do exploring the malls, there will always be brick and mortar.

Here's to your success!

Tim Knox

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.

Related Links:
http://www.prosperityandprofits.com
http://www.smallbusinessqa.com
http://www.dropshipwholesale.net

---

What Help is there for Veterans Starting a Business?

Some of the very qualities that attract people to the... Read More

Understanding Franchise Releationships in a Franchised Business

Now that you have invested your time, energy and money... Read More

Expanding your business.

Are you a small business owner who wants to expand... Read More

Starting a Small Business: Balancing Risk and Reward

In a perfect world, starting a small business would be... Read More

Business Scents - Do They Work?

You see it often in large shopping complexes. Customers seem... Read More

Building Your Business for Success in 2005

It's a strange anomaly.Most people who set out to start... Read More

Boat Detailers; Add-on Products and Services

As a Boat Detailing Specialist, you may want to offer... Read More

Conquering Confidence Killers for Small Business Success

"The way to develop self-confidence is to do the thing... Read More

Procrastinate Your Way To A Successful Small Business

What will your business look like a year from today?If... Read More

The Triple A Way to Spark Your Companys Profits

Winning small and home based businesses today must continually shake... Read More

Preparing to Launch Your Small Business

Small business owners often enter their field with great expectations.... Read More

To Buy Or Not To Buy: Lawn Mowing Business

TRUTH IN THE LAWN MOWING INDUSTRYWe do not wish to... Read More

Motorcycle Detailing Procedures Manual Sample Outline

If you are a motorcycle detailer and need to expand... Read More

Don?t Wait for the Perfect Plan

1. Don't Spend Too Much Time PlanningWhen you are entering... Read More

Small Business Pricing Strategies

TACTIC #1 -- Never simply slash your prices, unless you're... Read More

Do Your Best; Hire the Rest

One of the hidden perks of raising six children is... Read More

Is Your Business Property Safe and Secure?

Security Professionals provide the products and services necessary to create... Read More

Market Makers Play a Significant Role in Reverse Mergers

One overlooked individual in the process of taking a company... Read More

Five Facts and One Motivating Factor Behind a Successful Home Business

All legitimate home business entrepreneurs insist and announce loud and... Read More

Making a Donation to Bring MORE Business

How a donation is different from a sponsorship and what... Read More

Professional House Cleaning - The Dirty Little Secret

Are you tired yet of all the books out there... Read More

Pressure Washing Aircraft Hangers at the Airport

If you are looking for a way to own your... Read More

Franchises: How to Find the Best Franchise Opportunity for You

If you are looking for a franchise opportunity, the choice... Read More

10 Hiring Tips for Small Business Owners

As a successful small business owner,you're accustomed to long hours;... Read More

Basic Psychology of Franchisee Ownership and Expansion

If you are a franchisee of a large franchise system;... Read More

Want to Grow Your Business? Make an Irresistible Offer

My clients and many of my readers are small and... Read More

Competition in the Mobile Car Wash Industry

We have all seen the mobile washing units cruising our... Read More

Accounting and Billing Procedures for Small Business

No matter how small your small business is, it is... Read More

Make Your Business More Profitable

More sales and more profit. Isn't that what you want... Read More

Six Sigma for Small Business

It is not surprising that some people may perceive Six... Read More

7 Tips to Improving Your Cash Flow

Cash is King... That is what everyone tells us and... Read More

Asphalt Paving: Striping Your Parking Lot

As you may already know, asphalt paved parking lots do... Read More

How the Humble Ice Cube Made Business History

Gather round while I tell you the story of Kennebec... Read More