FrontofshopFRONTOFSHOP
E-Commerce: the irresistible force?
Ian James, chief executive of Retail Tribe continues his analysis of the e-commerce sector
many charlatans there are around- beware anyone selling you technology. They are almost as good as those trying to sell you pharmaceutical products to save you from the next plague. The pressure, even without
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technology sales people, to get online has never been greater. You’ve probably read the newspapers and the reported statistics in the growth of online sales during the last quarter of 2013. It’s an irresistible tide. And then I
meet a Professional who is determined to be the wall against that tide. Today, as I write this, I have come back from talking to a group of professionals and general management on the threats and opportunities of e-commerce. One professional in the group was particularly vociferous. His argument was that the moment
he introduces the concept to his members that they can buy their golf balls online, he might as well stop selling golf balls. Yes, they’ll buy their first dozen through his ‘portal’, and yes he can fulfil the order or they can be delivered via a third party to the member’s home. And yes he can receive a share or the entire margin. However in this Professional’s mind, he has introduced the golfer to the concept of buying their golf balls using their credit card whilst sat at home having a ‘wee dram’ (he’s Scottish, by the way). The argument continues: “The next time, that golfer will pause and do
a price check on the golf balls they’re buying, and they’ll find that someone else on eBay or Amazon or at
cheapestgolfshop.com is selling them cheaper”. Why shouldn’t they buy them from cheapest retailer? I couldn’t find fault with that argument. He’s right. The person that is
going to move into the internet domain to buy a commodity, even if they don’t themselves decide to look for the cheapest, is going to have a little online assistant within 12 months that will provide an interruption before the purchase is made with an alert that “these golf balls can be bought for £24.99 a dozen with a free glove thrown in out of a garage in Sunderland”(to quote another PGA Professional). There are some of you reading this right now who are in the business of selling golf balls online. You have a warehouse or a very large room
8 SGBGOLF Someone else will always have the same product for cheaper, and your customers will find i
with golf balls from every brand. You’re buying, receiving, storing, counting, loading onto your site, receiving an order, picking and dispatching those golf balls. You don’t mind that the margins are shrinking. Sales are up. You will be out of business though. It might be this year, next year or
the year after. There’s a saying in retail (my profession as opposed to golf): “it costs what it costs”. In shorthand that means that the cost of all the touch points must be paid for. If you have a warehouse, you have space, fixtures, fittings and a warehouse manager. You have shrinkage (theft), insurance, and handling. That all costs. If that’s in the middle, between the brand and the golfer, then your time in the spotlight is limited. The internet and economics will remove you. In the meantime, this particular Professional is absolutely correct. Do
not introduce, in any shape or form, the concept of buying golf balls online to your customers. Rather invest every moment you have in showing your customers that you can find the right ball for their golf game. That’s the way a golf professional delivers value to their community and to the brand.
e’ve started a conversation about e-commerce. Last month I talked about how
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