Retailing in the internet age

A lot of the traditional bricks and mortars retailers in Australia have been finding it tough in the age of online shopping. They've been slow to jump on the online retailing bandwagon (e.g. Harvey Norman) and their profits have suffered as consumers search for better bargains online.

If you're happy to save money and wait a little bit longer to receive your product, why wouldn't you shop online? I was looking at a watch that retailed for $200 at David Jones and I found it on Amazon for around $60.

The truth is, retailers cannot compete on price alone. The internet will win nearly every time. You only need to look at the price of cosmetics in the major department store and compare them to their US prices.

One major way for bricks and mortars retailers to fight back is to offer something the internet can't: a particular kind of service. Benefit Cosmetics is a particularly good example of this (though the example might be somewhat flawed). Why pay inflated Aussie prices for Benefit Cosmetics when you can buy them cheaper online overseas? Instead, in opening a brow bar, they're providing a service for people that the internet cannot. They're also ensuring their income doesn't rest solely on their products alone. I'm pretty sure they do quite well with the brow bar.

Also, David Jones and Myer offer personal shopping. A few months ago, I came across it at DJs and asked about it. The personal shopper explained that it was a free service, you tell them what you're looking for, they find it for you on that floor, and you get to try the outfits they pick out for you in a really nice room (not your typical changeroom) with a glass of champers to boot. The smart thing is that DJs put this service on the floor where the clothes are more expensive than the floor below.