Eight ways traditional retailers have it over their online competitors
Yes, you are reading that headline correctly.
Despite what you have read ad infinitum about the lot of the poor old traditional bricks and mortar retailer, they in fact have a head start on their online competitors that most entrepreneurs would die for.
Because in their haste to defend the patches they’ve dominated for so long, traditional retailers are forgetting that they already possess the vast bulk of the retail assets that their online competitors have to build or invest in from scratch.
As we’ve pointed out in these pages before, traditional retailers already possess about 90% of the requirements to set up a successful online operation with the remaining 10% being made up of online infrastructure and some web operations and marketing skills.
Let’s take a look at the bits they already possess.
A fundamental of retailing. Retailers clearly have plenty of stock and great channels and relationships to get more of it. By comparison, their online retailers either have to invest in it or spend considerable time creating relationships with suppliers to acquire it.
In addition to their stores, many retailers have other space to store their product. Online retailers have to find, create and pay for this space, which is a given for their traditional retailers.
Again a standard operational fundamental of retailing and an asset online retailers need to resource. Or put another way, properly resourced, existing staff can be re-purposed towards online operations.
Retailing has been around for centuries and over that time have developed systems for everything from sourcing product to conducting stocktaking. Onliners need to establish these from scratch.
Probably the most important asset of all. Traditional retailers in most cases have been looking after customers for years. If they could be counted, they would probably number several thousand. By comparison, online retailers need to invest heavily to attract those kinds of numbers.
Like many of these factors, traditional retailers have built in credibility that onliners have to work hard to attain. Simply by having a street address that can be passed, seen and even dropped into provides a massive advantage over their online competitors who battle considerable suspicion and caution before buyers will hand over their credit card details to them. This advantage cannot be underestimated in an increasingly cautious online market.
Having usually worked in the game for some time, traditional retailers have that asset that often cannot be bought – relationships with the gamut of retail stakeholders – stock suppliers, other suppliers, other retailers and as discussed, customers. Many online retailers have to build these relationships from scratch and may never be able to match those of the traditionalists.
8. Retailing experience
A massive advantage that should never be underestimated. The experience of the retailer is something that most onliners simply don’t have. Yet it is as valid to the online world as it is to their traditional modus operandi. The trick is simply understanding how to translate that experience to an online setting – something that with the right guidance, isn’t as difficult as many would make it out to be.
Unfortunately, instead of harnessing these invaluable assets to create an exciting new online channel for themselves, most traditional retailers are instead expending their energies on fighting what is clearly a losing battle with their online competitors.
In other words, they’re seeing the empty 10% portion of the glass instead of the 90% full portion.
By simply investing in understanding the online world or partnering with someone who does, their head start will be so considerable it could drive their online competitors out of business.
Now wouldn’t that be a refreshing headline?
Have you utilised your traditional retailing experience to kick-start your eCommerce website? Tell us all about it by commenting below.
In addition to being a leading eBusiness educator to the smaller business sector, Craig Reardon is the founder and director of independent web services firm The E Team which was established to address the special website and web marketing needs of SMEs in Melbourne and beyond.