Will online retailers kill local merchants

Will online retailers kill local merchants?

Before the advent of computerized technology and use of internet, the retail business was flourishing everywhere in the world. It had its magnificent and attractive showrooms with products on display, with people thronging in and out of the shop or the mall. It was a pleasant sight of the good old days when people used to go near those shops and malls to spend some time, if not buying.

Then the internet invaded the marketing arena. The use of internet gave rise to online shops and online trading businesses. Gradually, people were attracted towards that system of marketing required products and items. The internet facilitated the utilization of time. It allowed those segments of people who can’t afford much time to go out

2010 had significant increase in sales over 2009 and 2008

shopping on working days. They had the privilege, unknown otherwise, to sit at home and shop their requirement, at their convenient time. Eventually, many well-to-do people, educated, having comfortable source of income with jobs, were inclined towards the online shopping. According to a survey report of 2001 it was observed that 53% of women in USA were online users.

Online business Vs High Overhead Costs

Today, if you travel across any city within US, you will observe that there are many shopping outlets, which are either for sale or for rent/lease. One wonders if the owner has escalated the rent, but it is not true. The retail business is on the decline whereas the online business is growing. The online shopping is the consequence of people becoming more and more computer savvy. This exposure to modern technological development has made people to utilize more time in other constructive work than to spend time in shopping. However, if we evaluate the pros and cons of online shops with the retail outlets we will find that both have its merits and demerits.

In online shopping you can sit at home and browse for any commodity you can think of. You will have the demonstrated design, color, texture, price, synopsis, reviews, availability and shipping procedures. In retail outlets, they are confined to their respective items. For example if it is a grocery shop then it has only such items concerning to grocery, a hardware store have only hardware items and so no and so forth. The internet has millions of website and has all the items and things you can think of. You sit at home and reach the appropriate website to get the information

2010 had significant increase in sales over 2009 and 2008

and see their prices, compare with other brands and put it on your shopping cart, pay the bill through internet on your credit card and get the delivery at home within a stipulated time. It is so fascinating and so convenient. More conveniently, there are online shops that allow you to register with them and you can send your requirement through mail instead of spending time in browsing the internet and get the delivery at home. The logistics has become very simple and easy.

One business, many websites option

On the other hand, a retailer requires a space for shop, maintain inventory, employ manpower and accommodate all other overhead expenses. On the contrary the online shops have nothing to bother. They don’t need space, nor inventory, nor manpower and neither overhead expense. They interact online with the computer take the orders and procure the item over internet from the manufacturer and ship it to the client. They basically act as a liaison between the client and the manufacturer. The other drawback for the retailers is that they buy from intermediary sources and thus cannot lessen the price. The costing for them includes the cost of the item along with the cost of the employee, lease cost, electricity and other related expenses. Online shops enjoy the privilege of direct procurement with no overhead expense and thus their price in all the items are less compared to the retailers.

Incidentally, retail shops have a preference over the online shops when it comes to physical verification of the item or product. In online you can only see the pictures and price and additionally, the specifications related to the product. The retail shops have their expert supervisors to explain the function, durability, handling procedure and assurance to send service persons to your home to meet any complaints, at any time. The online shops can only provide you with a warranty or guarantee. However, many products available online provides time period for satisfying the customers requirement and otherwise to return the product and get the total refund.

Do online businesses have advantage over conventional stores?

Although online shops have leverage over the brick and mortar stores, it cannot provide the satisfaction to customers, as they have, when personally handling the product, reading the relevant brochures and convincing them with the specifications and original warranty document. These facilities are not available in online marketing. A buyer has to satisfy himself with the graphic reproduction or video demonstration of the items. The communication with the clients is done instantly in a retail outlet which is not possible in online shops. Therefore, online shops have many queries from the customers than the retail shops. This is where retailers consume more time in clarifying the inquisitiveness of the customers.

Another obstacle faced by online stores, is the fast development of technology. The technology you adopt today, tomorrow it may become obsolete and to cope with the cut- throat competition you have to induct the modern technological development. In retail shops there is no need for periodical technological developments and at the most they will have to enhance the productivity of their customer care service through call centers for better service. It is a fact that many industrial houses are switching to market their products online for cost efficiency. This provides them with a base to reach the customers around the globe through World Wide Web.

On the opposite, many consumers are still stuck to the retail shop for their requirements. Therefore it can effectually be inferred that unless some unforeseen changes comes through, in the technological world both the systems will prevail irrespective of if some is losing and some gaining. This is because of the prevalent psychological bent of mind of the customers. They tend to lean to such shops from where they get the best and the most convenient way to make their purchases. Thus it is only a matter of convenience and cost effectiveness.

I live in southern California, in los angeles, in a recent weekend I drove around town quite a nit, and if there was something I noticed, was the abundance to retail space available for lease, thought-out entire Wilshire louvered, Melrose, santa monica, west Hollywood “regular” los anagles” and where not really ? I saw practically hundreds of retails store front empty with the sign “for lease” on the window …..

Are landlords still trying to keep the rental prices high or is online giants retails killing small business ?

In recent weeks of 2010 as the holiday season was booming, we could really see the retail portion of the economy picking up, and with many reports about significant increase in sales over 2009 and 2008,

So what could be the reason ?

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