ABSTRACT
It seems all so easy. Just apply for a domain name, make a website and there you have it – your own shop on the Internet. You have no other costs such as for shop premises, warehouse, staff or advertising costs. You could even start your business from your bedroom. The many webshops are looked upon with jealousy by retailers, who have to find a good location, rent or buy their business premises, lay out the shop and advertise. Webshops certainly seem to have it easy. Unfair competition as far as retailers are concerned, which is often confirmed by the competitive prices. What’s more, customers are also increasingly buying ever more products on the Internet. The growth percentages for the coming years are estimated at between 10% and 15% each year, making a possible turnover of 15 billion in 2015 a very realistic figure (approximately 30% of non-food retail). And this turnover will, of course, be at the expense of the turnover of the existing retail trade. This certainly makes the Internet a real threat to the existing retail trade, and so the feeling of unfair competition is understandable. Webshops do not require any licence to establish a business, have no restrictive opening hours, have no parking problems, require limited investments and, what’s more, they can benefit from the economic tide propelled by the new buying behaviour. But do existing retailers focus too much on the advantages of webshops and not on the disadvantages? Is it possible that here, too, the grass is greener on the other side of the fence?
According to recent statistics, we did 13.5% of our shopping online in 2010 and according to BCG that is expected to rise to as much as 26% by 2016. If you run a small-medium sized business this figure may concern you, especially if you rely entirely on one-to-one contact with your customers – but it shouldn’t. In the UK, Online shopping makes up 8.3% of the total economy - the biggest share of all the G20 countries. That’s a share which is bigger than the healthcare, construction or education sectors.
Source: Dave Burton, doivedesigns.co.uk, 21 March 2012.
With physical products shops have a great advantage over the Internet, as these products have to be either delivered to the customers (by the webshop) or collected from the shop by the customer. The shop, therefore, has two important roles for these products: a distribution role and an advisory role. With virtual products, however, it is the webshops that have an advantage, as no delivery to the house is necessary. Customers can after all buy and download the products directly from the Internet. This is also the reason that travel agencies, music shops and bookshops are slowly disappearing from the high street. As these products are virtual, they can be downloaded by customers. It is therefore no longer necessary to go to the shop.