Saturday, January 7, 2017

Where Brick and Mortar Pure Play Beats eCommerce

Now if you ever talk about any given business, even with audited statements, you really cannot tell very much.  And even if a single example is valid, then question the is, is it reliable?  Will it work for anyone else?

I've been in Paris the last couple of weeks, and was introduced to a brick and mortar retailer specializing in sporting goods.  The tactic is pure contra-eCommerce, something I have yet to see, a "brick and mortar pure play" to reverse the jargon of the 1990s.

The natives tell me this fellow spotted the flaw in the eCommerce conceit, and devised a way to best the internet.  But first, let's review.  There are two insurmountables in eCommerce -

1. It costs more to gain a customer marketing online than you can make off what you sell to that customer.  eCommerce is a money pit.

2. The "last mile" is the most expensive part of logistics.

And what is the big advantage of the internet?  If you know what you want, the best version at the best price, the internet is the place to go.  (Fantasy, of course, but that is the world we live in now.)  knowing reality, you may then proceed to make money.

Dealing with reality, this fellow has rented out many small storefronts in one section of Paris, called the Latin Quarter.  Take a look at their website (and scroll down to see a map for a visual of how many stores he has in this one area, and only this area.)  Twenty years so far and still ticking.

Each boutique is dedicated to one sport.  There is the sailing boutique.  The rock climbing boutique.  The whitewater kayaking boutique.  The skiing boutique.  The bicycling boutique.  In each the has the the best brands, the best models and sizes at persuasive prices.  In this way he kills the internet competition.   He has what you want, in your size, at the right price and you can have it right now (which means the last mile is handled by you taking it home.)

Not only has he conquered Paris for sporting goods, he has repeated this pattern in ten other French cities.

Yes, you can order online.  Sort of.  But pay by check is preferred, mail it in.  But over 800 euros, they want a bank transfer. Yes, you can pay by credit card or debit card, but they make that difficult, not easy.  In essence this is just the way you'd pay thirty years ago from a mail order catalog,

Indeed, their stores hand out free-of-charge a huge 500 page paper catalog, for today, as 30 years ago, you have to have a paper catalog for effective retail.  The internet is strictly self-service checkout.

It has a website, with all of the social media buttons, so it is not short of organic materials for being ranked high in search engine searches.  But guess what?  The number one retailer of sporting goods in Paris shows up not until page three on a google search for "Paris sporing goods."  But then, who cares about what a google search gets you?

Another sporting goods store, REI, has proven to be internet-competition-proof as well.   In this instance the store is a co-op, that is it is owned by its customers, so it is not another example as a test of the hypothesis.

How did he figure this out?  First of course, ignore the hype, deal with reality. Was a Starbucks on every corner an inspiration?  Who knows?  But as the dinosaur retailers die, and a small business renaissance fills in the vacuum, examples of how to do it right will be valuable.  If this example is valid, now it needs to be tested for reliability.

The title of this post is disingenuous.  eCommerce is a non-starter, so brick-and-mortar is already the winner.  The internet is about self-service check-out.

Feel free to forward this by email to three of your friends.