Internet shopping and the service condundrum

One rather disturbing trend I’ve noticed with the rise of internet shopping is that the inherent structure of the internet means that it depends almost parasitically on the good will of brick and mortar stores to provide showroom space. There are some products which are consistant across all stores since they all derive from the same ultimate source yet need to be viewed in person. Stuff like TV’s, digital cameras, keyboards, mice, perfumes, cookware, whitegoods etc. you can’t get the whole story just reading reviews online, you need to actually feel the goods in your hand and see if it suits you perfectly. But, once you’ve judged all that and made your decision, theres nothing stopping you from them going online and searching for the best possible price. In effect, you’ve just used a companys showroom space for free without giving them any compensation.

With such a scenario, theres no way a brick and mortar store could possibly compete with an online one since they have this huge overhead with no discernable benifit to the end consumer. However, without such brick and mortar stores, the internet stores would find them hard pressed to survive and shopping would be much less efficient.

Is there some fundamental way to solve this problem? Perhaps large enough department stores could leverage their brand power to force manufacturers to create 'custom lines" which are unique to their store. Or maybe manufacturers will see themselves as responsible for providing the square acerage neccesary to promote their product and you would instead be confronted by a showroom with 100 reps all trying to convince you their product is the best.

And yet, they not only survive, they prosper:

So are they defying gravity, or is there something wrong with your thesis?

Other than that I can get that DVD from Best Buy right now, even if it is a buck or two more, rather than wait a day or two or more to have it delivered from Deep Discount DVD. You assume that people only buy from where they can get the lowest price, but price is only one factor when deciding what to buy from where.

One other you’re forgetting is the hassle of shipping. I live in a secured apt complex without a full time manager on site. I work 8-5 roughly and don’t have the freedom to take too much time off during the day unless it is very important. So, UPS and I don’t tend to work well together. They deliver M-F during business hours and there is no place to leave things here. UPS is located about 20 miles away from where I live.

Also, returns are a pain.

So, the Brick and Mortar store wins more often than not. Some thing I buy online if I know they’ll be shipped USPS. The post office is right down the street and they’re open Sat. Morning.

I’ve found online shopping to be great for small things (CDs/DVDS/etc) as well as some clothing. Not sure I’d deal with the hassle for other things.

Sure, DVD’s buy them at best buys, you save a couple of bucks maybe. But what about big ticket items, saving $100 off a $3000 TV set is a pretty big deal. And theres nothing stopping an internet retailer from having just a comprehensive distribution chain as a brick and mortar place. I know of several computer outlets which are run over the internet but have a physical location. Order something before 9am and they guarentee it to be ready to pick up by 12pm. All it costs is just one, relatively unskilled person, sitting in a tiny storefront and you get almost exactly the same capabilities as a full fledged brick-and-mortar for a fraction of the price.

I usually work in the opposite direction. First, I browse the internet, find out things like what features I actually need or want. Then (still online) I read reviews, product specs, etc. and narrow it down to a choice or three. By this time, I’ve seen lots of the prices on the internet, so I have a pretty good idea of what and item should cost.

To make my final decision, I’ll go to a brick-and-mortar to actually see, lift and fondle the merchandise. I also look at their price. Since I’m there already, and the new shiny is calling my name, I’m most likely to buy at the b-a-m if the price is around what I know I can pay online.