@jwaldman thanks for the insight... the first session to every offline shopping transaction, that's an interesting play
@Nale you're generally right that 90% still shop in stores, but when you look at specific categories that have been accessible to shop online for a long time now, like books and media (rest in peace blockbuster and barnes & noble), it's almost the other way... that 90% offline retail number counts a category like groceries, something that only recently became available to purchase online... so it is conceivable that in the not too distant future, as more categories can actually be bought online, that the majority of transactions will happen online as well. The preference to shop in stores has mostly been a service issue, and it won't be an issue much longer... look what stitchfix is doing in women's apparel, a category nobody believed would ever work online, let alone the traditional apparel e-tailers... instant gratification? ebay now or postmates will have there in an hour... no shipping fees? you'll be hard pressed to find an online retailer that doesn't offer free shipping... easy return? stitch fix, shyp, brandid, won't be an issue much longer... talk directly to seller? you can do that too with almost every online retailer now
point being, that the trend is towards online, with significant YoY growth, I believe 16% across all online retail in 2013... there's a reason amazon keeps investing in growth, it may be another 10 years, but online shopping ubiquity is coming
Curbside makes it easy to find, buy and pickup products at nearby stores.
A handful of other companies are making is easy to find, buy and receive products wherever it is you happen to be.
@jwaldman what is the vision/thesis here? That people already on-the-go need a way to streamline their impulse or utility purchases as they make their way from point A to point B? How do you position this relative to eBay Now, Google Express, Postmates, Six Doors, etc?
Is it simply a matter of saving some time?
I agree on the intersection and the novel extension of the brand experience to brick-and-mortar... but if a good retail store does 2M-3M a year, they would need a lot of good retail stores at scale to contribute meaningful revenue against the online opportunity. E-commerce is a game of inches, and online is a much more efficient model in re: to cost structure and FCF. Definitely exceptions here, but likely will remain exceptions not the rule.
That's a fair point, but I would say that is more a marketing initiative for customer acquisition and retention than it is core business model and meaningful business line.
Seems useful for some people. Particularly those in the suburbs. Maybe an interesting BD partnership opportunity with Postmates?
Also, congrats on what I think is your first hunt @hunterwalk!
@guygal not convinced. Both Warby Parker and Bonobos stores showed meaningful business results. My bet is on intersection of e-commerce and bricks-and-mortar rather then pure online.
Wanted to share some of customer insights from working in this space. Most transactions today (estimates vary but number hovers around 90% ) are still offline. While eBay Now, Google Express, and others are experimenting, the delivery model has yet to be proven scalable. In the 90s it failed miserably with WebVan. Customer data shows that a sizable segment of buyers prefer to shop in stores. There are a number of reasons; instant gratification, no shipping or delivery fees, easy return, ability to inspect item (especially if size is involved), can talk directly to sales associate/seller, support local retailers, etc.
@ffumarola@guygal When you as a customer don't pay for shipping, the e-commerce company absorbs the cost.
The benefits I enumerated come from a study of 3236 randomly chosen people answering a question about purchasing locally.
Not arguing that online shopping isn't awesome but that a traditional e-commerce business finds it tough to generate operating profit at scale. This is why new and innovative models have done well when they don't compete directly with Amazon.
Great to have a passionate discussion on this topic :-)
@ffumarola Andy Dunn wrote this great article http://bit.ly/1ka7fBS I'll quote him here 'The entire e-commerce P&L is architected to make it almost impossible for you to generate EBITDA.' By Andy's estimation, Zappos had 2% EBITDA margins at time of acquisition.
No the study I'm citing is not available but here's something similar http://bit.ly/1rJOklp You can find more of same if you look in all the usual places :-) Of course take it with a grain of salt. What buyers say may not be what they do. Still valuable to talk to them however.
Reminds me of Milo.com but with pickup. Welcome improvement to an antiquated shopping experience. I have to remember that this exists next time I go shopping.
@guygal There is also a trend of online retailers opening physical stores (Warby Parker, Bonobos and Nasty Gal come to mind). Fascinating to watch things change :-)!
Re: the benefits @Nale "There are a number of reasons; instant gratification, no shipping or delivery fees, easy return, ability to inspect item (especially if size is involved), can talk directly to sales associate/seller, support local retailers, etc."
Online shopping is quickly catching up to B&M in a couple of those areas (instant gratification, inspection). And in the other pros, they don't really line up too well for me.
E.g.
As shipping fees become non-existent, this won't matter. Counting the cost of my prime membership, I pay ~$1 per shipment. If I were to spread the cost of shipping out over the cost of purchases, it is a very small fractional percent on top of the price. But typically the selling price is less than I can find locally anyways... so its a wash (or more accurately a pro for online).
Is it really easier to return goods to a B&M store? My closest stores I would buy from are at least a 15-20 minute drive or 30 minute mass transit ride from me. Returning online just means throwing a label on the box the item came in and dropping it off at one of the many drop off locations within a few minutes walking distance from me.
Is a Best Buy employee hounding me for a service plan really a benefit? And they rarely even understand what they are selling... I'm better off reading the reviews on the web site.
I think that for local retailers in certain segments to survive* the onslaught, they are going to need to become much better at multi-channel so they can realize some of the cost efficiencies with doing so. Through these larger efficiencies, they may be able to provide a compelling advantage of having a show room + the ability to do insanely quick delivery. One thing you see from Warby Parker and Bonobos is that they are AWESOME online and they are opening their B&M's in highly populated and affluent areas. This is a much different strategy than most B&Ms that open up football field sized locations in the middle of rural and suburban areas. I don't think you'll see a Bonobos or Warby Parker do that.
* I use survive dramatically. They will survive, just not in the same capacity as they have for decades.
Lex