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Popular Greetings ~ Tel: (800) 505-5514 ~ Fax: (410) 392-3731 98 March 2011
ALTHOUGH IN-STORE retail spending jumped signifi cantly this past holiday season over last year, rising a healthy 5.5 percent according to MasterCard, that number was overshadowed by a 15.4 percent increase in online spending. It was the fi rst time that online spending accounted for more than 10 percent of all gift purchases. Even before the holidays, brick and mortar retail- ers were suffering. When Best Buy reported disappointing third quarter results in early Decem- ber, analysts attributed the poor numbers to increased competi- tion from online retailers, and Best Buy’s stock dropped 18 percent in one week. The conventional wisdom is
that consumers will pay a pre- mium for the convenience and service provided by brick and mortar stores. Yet one writer at The Harvard Business Review notes that as online retailers’ growing market share attests, that wisdom isn’t holding up. “I went online to buy a TV that a Sears associate helped me se- lect, and I saved $150,” writes retailing blogger, Rafi Moham- med. “As the sliding value of Best Buy shares confi rm, too many shoppers aren’t willing to pay a premium for sales associates, in-person demonstrations, or the ability to get a product right
continued on page 100 INDEPENDENTRETAILER
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