In the 1990’s when use of the internet was expanding at incredible speed and trends were emerging that had business traditionalists uttering phrases like “clicks and mortar”, the retail game appeared to be forever changing in a few short years. The bubble marketers were working to convince everyone that a physical storefront not only had to be quickly supplemented with a viable eCommerce presence, but that eCommerce revenue would quickly outpace and perhaps completely replace traditional commerce.
Then the bubble burst. I remember quite vividly sitting in a previous employer’s London office in late 2001 watching the commerce world react like an expanded spring snapping back to its original pre-bubble shape. One image in particular that sticks in my mind is that of looking out over the shops lining Regent Street and, seeing the steady stream of people popping in and out of the shops, thinking to myself that somehow the buying public just wasn’t ready to give up the physical store experience. Over the following years, online commerce continued to expand without the P.T. Barnum-esque atmosphere of the late 1990’s and online processes continued to evolve that increased the viability and profitability of companies focused on eCommerce. Consumers also became more comfortable with online commerce and more drawn to the online experience. The online channel became a core function of any viable business.
Everyone’s likely heard the news by now that Borders Books is filing Chapter 11 bankruptcy while it restuctures its debt and closes unprofitable stores. Some analysts have mentioned that Borders’ late response to macro-economic factors such as eCommerce growth and digital downloads was a root cause of the bankruptcy decision with one analyst calling the situation “inevitable”. Being late to the game in eCommerce doesn’t just mean you get a bad seat — it might also mean that you’re left watching from outside the arena.
Ten years after the internet bubble burst, I’m again sitting in my company’s London office, which coincidentally happens to look out over the same stretch of Regent street. The stores are still bustling in this busy part of town, but many stores have come and gone. Just for grins, I decided to look for an online presence for the stores I could see on the street below. Austin Reed, L.K. Bennett and Habitat were all on the opposite of the street below and all of them have online shops that offer quick shipping, style guidelines, social networking integration and one has online tools to enable a better shopping experience. I also asked a couple of coworkers when they made their last in-store purchase of a book. Not surprisingly, it had been a while. I wonder what the outcome would have been if I had done the same experiment a decade ago.
Retailers like Borders that were slow to react to changing macro factors and have been late followers of commerce trends, will continue to suffer in the new retail world. Changes in enabling technologies and associated reductions of cost in implementing online applications are making ROIs more attractive than ever. Technologies like cloud computing lower initial investment in infrastructure and allow for quick and cost-effective response to peaks in demand. Other factors such as leveraging a brand’s online community and the ability to deliver effective and up-to-date content and tools are still more reasons to take advantage of current commerce trends.
The barriers to entry continue to ease and the opportunity for greater returns is evident. As these once traditional barriers continue to fall, retailers must move quickly to expand their horizons in eCommerce. Or, one can sit idle and keep a bankruptcy attorney’s number on speed dial. As one analyst mentioned, it’s inevitable.