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The Case Against Retail Sales
Why Online Sellers Are Gaining Ground

Retail stores – especially electronics stores – had better get their act together, or they'll become extinct.

Shopping in stores is rarely a pleasant experience.  Parking lots are jammed, checkout lines are long and slow, and clerks are hard to find (really knowledgeable clerks are virtually nonexistent).  I used to think that seeing the physical product "in the flesh" before I bought it was worth the trouble.  That becomes less true every day.

A recent experience is typical.  I wanted to buy a DVD recorder, and, having done research online, I knew exactly the brand and model number that I wanted.  At first, I chose not to order online because I hoped to pay cash and pick it up the same day.  Various stores' online sites carried it, so I had a good idea of the expected price.

First stop was Circuit City.  I found what I wanted on the shelf, but I couldn't find a clerk easily.  When I did collar one, he informed me that the display model on the shelf was the only one left.  He wasn't sure he had the literature for it, but he suggested that I could download that from the manufacturer's website.  I figured that, if he gave me a really good price, I would take a chance on the display model.  When what he offered wasn't even enough of a discount to cover the sales tax, I told him to forget it.  He persisted in giving me a sales pitch for a used DVD recorder.  (By the way, I'm thinkung of buying a high-definition, widescreen TV this year, and now I've mentally crossed Circuit City off my list of places to look.)

I went to Best Buy, the only other electronics discounter in town (besides Wal-Mart, which may be good for toasters and coffee pots but isn't a place where I want to buy high-tech equipment).  Best Buy was touting a price $50 under what I had seen – but the fine print on the tag told me that this was after the manufacturer's mail-in rebate that I would get wherever I bought the recorder (even online).  In short, it was no bargain, and the discount was not a discount at all.  They had two in stock, but it was again no deal.  I didn't even bother to look for a clerk.

Home I came, empty-handed, and turned on the computer, where I went back to my Google search for the DVD recorder.  Although many brick-and-mortar stores had websites, few were well-designed, and prices were the same (at Circuit City and Best Buy, at least) as those in the store.  Since I had to add shipping to the cost, this was no bargain.

On the other hand, companies that dealt exclusively in online (and, in some cases, catalogs) were cheaper, even allowing for shipping costs.  I found my recorder at a major online discounter for $50 less before the rebate.  The brick-and-mortar stores lost a sale – and probably more in the future, as I shall be more inclined to try online first.

If retailers want to hold their own against the burgeoning online businesses, they will need to:  (a) have competitive prices, (b) provide the kind of customer service that makes going to the store worthwhile, (c) keep closer tabs on inventory of products that are in high demand and  quit promoting items of which they have only one in stock (bait and switch), and (d) hire people to construct user-friendly websites to supplement their store business.

My guess is that this won't happen.  As computers proliferate and broadband Internet expands, online business will continue to erode traditional retail sales.  The likes of Circuit City and Best Buy will be scratching their heads and asking, "Where did we go wrong?"  Hey, guys, you already have by not seeing the precipice that looms ahead.