Monday, October 22, 2007

SHOULD WAL-MART'S ECOMMERCE STRATEGY BE EMBRACED BY SMALL RETAILERS?

Ecommerce shipping success brought about by Wal-Mart's example has spawned a good number of online retailers now offering buy online, in-store pick up option. Can this be the beginning of zero shipping costs and quantum leap on sales conversions by online retailers? Is this going to be the ultimate ecommerce strategy that will break the "shopping cart abandonment tradition"?

Who knows, but this is when finding the answer to the question really matters. Why? Because since the trend has been set by big online retailers such as Wal-Mart or Ace Hardware, many smaller retailers aren't likely to follow their footsteps. An ecommerce strategy that would allow buyers to find the product by going to the nearest store itself after showing the intention to buy it from the online store may cost them more money than profit itself.

For example, niche apparel stores such as Nike, American Eagle, or Callaway Golf may find it actually more difficult to profit by shipping smaller or fewer items to fewer stores nationwide. Sure, they can adopt Wal-Mart's ecommerce strategy but they would have to ship products on longer time frames -- weeks, instead of days, to save costs. I'd say the question now can only be answered by individual small retailers themselves.

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