| BUSINESSWEEK ONLINE : DECEMBER 13, 1999 ISSUE | ||||||||
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| BUSINESS WEEK E.BIZ -- CUTTING EDGE
Bricks-and-Mortar Blockheads Why the big guns of retailing need to make shopping easier--and faster Saturday at the Wal-Mart store in Mountain View, Calif. Eight checkout lanes are open, each 8 to 12 shoppers deep. And every single one of them looks downright miserable. Including me. Besides the lines, the coffee grinder I want is out of stock. Braving a long express lane with a few other items, I reach the front--22 minutes later. At least there's entertainment while we wait: A TV screen above the door displays the views of four security cameras. O.K., I know people don't go to Wal-Mart (WMT) for the ambience. But low prices and broad selection don't change the fact that it's often simply a horrible experience to shop at big stores like this--and not just Wal-Mart's, either. Most traditional retailers are failing to mind their own stores at precisely the time they need to fend off the Internet hordes-driving more people like me online. The thing is, I much prefer to support local businessess--even chain stores since they employ locals. And I'd like to believe traditional retailers when they argue that they outdo online stores in convenience, ambience, and more personal service. But with few exceptions, their arguments are bogus. Let's look at convenience. Sure, you can just drive to the store, buy stuff, and have it right away. But as rush hour begins to envelop the entire day, and store lines get longer, the time the trip takes renders this supposed convenience dubious. And then there's no guarantee that what you want is in stock. After visiting a half-dozen stores looking for a common Krups coffee grinder, I ordered it with a simple search on Yahoo.com (YHOO). As Amazon.com (AMZN) Chief Executive Jeffrey P. Bezos points out: ''Time is the most precious commodity in the late 20th century.'' How about ambience and personal service? Sorry. The most successful retailers, such as Wal-Mart Stores Inc. and Costco Wholesale Inc. (COST), are the very ones that have made bare-bones stores the new model. Merchandise is stacked so high and tight that it takes a clerk, if you can find one, to pry it from the shelves. The argument I hear most from traditional retailers is that consumers prefer to return merchandise to stores instead of having to mail it back. Indeed, surveys back up this point. But I wonder if the people polled have actually tried to return something to a store. It's agonizingly slow. And most stores don't yet allow returns of online merchandise to stores anyway. It's not even necessarily cheaper to buy in traditional stores. It takes at most three books, for instance, for the discounts at Amazon.com to offset the shipping costs. Also, it's much easier to shop around online. That's why 54% of buyers believe they get a better deal on the Web, and only 16% think they save more in physical stores, says Laurie Windham, CEO of market researcher Cognitiative Inc. Clearly, physical stores need to reassess their strengths. By failing to use their people, bricks, and mortar to improve the buying experience, they're throwing away the only edge they have. This may be heresy, but it's as important for physical retailers to make shopping in their stores easier as it is for them to go online. Even baby steps, like shifting stock clerks to registers in peak times and installing kiosks to get product information and order out-of-stock items, would help a lot. Most of all, retailers need to think outside the big box. Jupiter Communications analyst Ken Cassar suggests that Barnes & Noble (BKS) stock fewer books and expand adjoining cafes--offering more of the flesh-and-blood community feel that online stores can never match. Mark Borsuk, managing partner of consultant Real Estate Transformation Group, thinks Office Depot (ODP) could open small stores on floors of big office buildings. Some of this may cost more, and no retailer wants to hear that. Not only are they losing money getting their online ventures established, they must also spend more on stores--or at least make some wrenching changes. But if they don't, those checkout lines may soon shrink on their own. By ROBERT D. HOF, rob_hof@ebiz.businessweek.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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