Webshop a non-starter without a real shop?
17 jan 2012 - On the way to New York I started reading last Friday's Telegraaf [Dutch daily newspaper]. Pity was that I couldn't respond immediately, and once I arrived at JFK it turned out that I was too late for the NOS [Dutch TV-news broadcaster]. 'Webshop's a non-starter without a real shop' and 'Fun's over for pure webshoppers!' These headlines were based on a study of the sector carried out by ABN AMRO. According to the researcher, Michel Koster, 'shopping exclusively online has passed its peak'.
Just concluded a FIRAE meeting, a group of global retail association executives that meet annually in New York just prior to the NRF Retail Convention. One of the subjects discussed was the impact of e-commerce on traditional retail. Conclusion was that its impact will be enormous in the next few years. Half of these global industry leaders expect that, in 20 to 30 years' time, online will take up between 25 and 50% of the worldwide traditional retail market. This figure had already reached 7% in the US in 2011.
An important driver for these expectations is the changing way in which consumers do their (exploratory) purchasing all over the world, influenced by rapidly changing technology which permits us to consume at any time, anywhere, online.
The results of the ABN AMRO study resemble the results of a study done 10 years ago when it was common practice to minimise the impact of online shopping. According to Koster, 'shopping exclusively online has passed its peak'. Koster advises webshops to urgently consider opening a physical shop quickly, before it's too late. What a lot of nonsense! The majority of pure online shops have no place in high streets malls. '
'People want to see things, compare and assess them', wrote Koster in the Telegraaf. He then added that the best place for this is in a physical shop. Koster seems to be pleading – against one's better judgement – that something should be done about the increasing lack of tenants in many inner cities. He would probably do well to re-examine the analysis of retail trade entrepreneurship that appeared in the Trouw [Dutch daily newspaper] last week. It seems, however, that Koster is seeking recourse in wishful thinking, perhaps for the benefit of ABN AMRO's own real estate portfolio, neglecting, en passant, the economic laws of online retailing, altering consumer behaviour and – simply – altering market circumstances.