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Is Being Swamped by the Internet Inevitable ?
by
David P. Cunningham, P.E.
Copyright 1999
Is Being Swamped by the Internet Inevitable ??
In a Word -- NO !!
We have been told ad nauseum that the internet is a great and
wonderful place sell virtually anything for any price. We've also
been breathlessly told that the internet is the California Gold
Rush of the 1990's; that vast fortunes are being made and that
we are being left behind if we don't participate.
So, are vast fortunes being made ? Sure, but just as during the
California Gold Rush, most of the money is being made by
those who supply the tools, software, services and supporting
infrastructure which comprises the internet. These relate to the
clothing, tents, tools and equipment supplied to the 49ers of the
California Gold Rush.
With the notable exception of Amazon.com there are very few
internet companies making any money. We told that this is their
"business model" and that their intent is, with their huge market
capitalizations, to be the first and biggest to market. Revenues
and profits will follow -- so we are told. I don't know about you,
but I do know this. If I don't generate revenue through what I
do and sell, then within a short time I won't have a business.
Perhaps you'll forgive me for being a bit skeptical of this form
of "new math". But, thank you, I'll take a business, especially
when its a small business, with a demonstrated revenue stream
any time.
Please don't misunderstand me. I'm neither a Luddite nor an
internet disbeliever. I do, in fact, think that the internet and
ecommerce and their associated technologies offer
unprecedented opportunity for long term business development.
It is simply that there are long established laws of business and
marketing which have to be observed. The internet and
ecommerce offer virtually unlimited opportunity for the growth
and development of spectacularly successful business.
But these businesses must be based upon sound principles.
Skillful application of long held business principals, dedication,
skill and most of all commitment will be required to achieve success.
Two notable examples of this are Amazon.com and Garden.com.
Each has a comprehensive, well considered business plan which
is based upon sound business principles. Most especially, neither
is a quicksand based get rich quick scheme. I believe that both
have the potential to make significant money even if they are not
currently doing so. If someone promises you wealth without the
attendant work run, don't walk, the other way. The internet is
rife with sucker schemes and fraud. If it is too good to be true,
then beware.
You can remold and develop your "bricks and mortar" antique
or craft mall business to meet the competition of the internet.
And, you can win. As a fixed base "bricks and mortar" business
you have some really significant advantages -- if you exploit
them. Can you stick your head in the sand and hope that the
changes you see about you will simply blow away ? There is
no way that is that going to happen. First, the changes in the
marketplace are not only not going to go away; they are going
to accelerate. Second, if you stick your head in the sand
something else happens. Yes, your butt sticks up in the air and
someone will not hesitate to kick it.
You can remold and develop your "bricks and mortar" antique
or craft mall business to meet the competition of the internet.
And, you can win. As a fixed base "bricks and mortar" business
you have some really significant advantages -- if you exploit
them. Can you stick your head in the sand and hope that the
changes you see about you will simply blow away ? There is
no way that is that going to happen. First, the changes in the
marketplace are not only not going to go away; they are going
to accelerate. Second, if you stick your head in the sand
something else happens. Yes, your butt sticks up in the air and
someone will not hesitate to kick it.
Fixed base "bricks and mortar" antique and craft malls have the
following advantages:
* The customer can see, touch and inspect the merchandise
* The on-line auction business is rife with fraud. Your customer
has immediate recourse
* Listing items for sale takes a significant amount of time. Your
dealers have no need to list anything.
* Bid monitoring can take an inordinate amount of time. Your
dealers have no need to monitor bids.
* Packing and shipping sold merchandise can be expensive and
time consuming. You don't have this expense.
* Auction site fees and commissions can be substantial. You
can offer competitive commissions and fees.
* Returns are common. You can control returns through
examination and policy.
* Collecting for sold merchandise can be difficult. You collect
at the time of sale.
* You have the additional advantage that, if your dealers agree,
you can post items for sale to internet auctions for your dealers
and handle all the details on a fee basis.
These issues appear to present ample opportunity to create a
competitive advantages for a fixed base "bricks and mortar"
operation. They should help you generate increased sales and
improve dealer retention.
As you can imagine, we are very strong proponents of the
appropriate use of technology in antique, collectibles and craft
malls. Because of the nature of our business this has more to
do with supporting both the people side of the business and the
business side of the operations than with the technologies
themselves.
That is the technologies should be usable to make the
customer's experience with your business better and more
pleasant. It should improve the checkout process, make
receipts clearer and more easily understood, allow for quickly
identifying customers and provide them with any available
special benefits. Your dealers should benefit from your use of
technological solutions by providing them with prompt payment,
clear and easily understood settlement sheets and easily
accessible sales information.
You should benefit from the appropriate use of the technologies
you employ by reducing your operating costs, improving
customer service, increasing customer throughput, reducing the
time required to do settlements and serving your dealers better.
The days of "status quo" are gone forever. You will need to
improve your business to meet heightened competition from
"with it" malls and the internet or be eventually be driven out of
business. If your mall is paid for and you have no mortgage, if
you operate primarily with conscripted dealers for floor help,
and if you have the local market to yourself you may be able to
survive for some time.
However, there is simply no question that, in the long range,
neither the old "rent space and hope they come" business model
nor the pure internet business model will survive and prosper.
All truly successful mall business operations will operate based
upon a hybrid business model which incorporates other concepts
and lies somewhere in between. One of our goals is to help you
achieve your goal to build a vibrantly successful business.
We've only just begun.
We can be very certain of several things:
* It won't be your Father's antique or craft mall
* Change will come quickly - direct it to your advantage
* The status quo is gone forever and will not return
* The "Web" changes everything (more this in future articles)
* Technology will not, in and of itself, save you. Only when
applied to business problems in the context of fundamentally
correct frameworks will technology help you. Incorrectly
applied, technology will only make things worse more quickly.
* Antique and craft malls are fundamentally people oriented
businesses -- to a substantial degree greater than ordinary
businesses. Ignore that fact at your peril.
* You have at least two customer groups -- your dealers and
the through the door customers
* The nature of our business requires that it have a human face.
All technology must be oriented toward supporting that
concept and cannot be "in your face".
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