Retail : Online vs traditional
- The traditional model offers a superior customer interface as you can touch and feel the product. In the book category, this means you can leaf through its pages to help you in your purchase decision. This can be quite easily overcome in the online context by snapshots or teasers or chapter-one pdfs in the online store
- The traditional model also enables product discovery more easily. I mean that you can spot a book far more easily in the store- or any other product category for that matter. This is a value addition that the brick-and-mortar model provides that cannot be easily matched. Further, this has nothing whatever to do with familiarity of computer and/or internet usage, seeing as I have been working on computers for 20 years now. You can only find a product on the internet that you know exists - this is an issue with the nature of the customer interface
- Online sites can pass on cheaper prices to customers simply because companies save on costs when they tie up with online retailers. That translates into customer discounts
- This will, of course be category specific. In categories which offer other interfaces with the customers - durables, for example- where you can contact customers through advertising and build a brand recall and image, the dynamics involved are bound to be very different. Other parameters will also matter- the more distributed the market / wider product choices and lines etc - all this will alter the business model
It is a most interesting battle that is unfolding here...