This weekend, my wife and I visited my sister in the suburbs of Boston. Given the difficulty of shopping in Manhattan (and expecting our first child in February), we drove to the local baby store to look at all of the different strollers on our list. After getting a fantastic product demo from an extraordinarily helpful salesman, we were sold on an overly expensive option from Bugaboo. Instead of purchasing it right there on the spot however, we went home and did a Shopping.com search to find the lowest price. Surprise, surprise, Amazon.com was the winner.
I think this is pretty much the way people shop in the digital age and I would be livid if I were a salesperson or business owner. After all, the sales guy I referred to above provided a tremendous service as did the store who housed the physical inventory for us to see in person, but Shopping.com and Amazon made all of the money! While I truly appreciate the power of the Internet and how it has revolutionized shopping, I believe it is greatly aided by physical stores and salespeople who increasingly seem to be getting the short end of the stick.
I am convinced that a more complementary relationship between physical stores and online marketplaces can exist. The fact is the ability for a consumer to test and touch a product increases purchase intent. However, as a larger percentage of consumers test in-store and buy online, offline businesses suffer. At some point, I would think that the closure of these stores could impact online businesses as overall demand may decrease or return rates rise just enough to pressure already razor thin online retail margins.
Cutting in offline retailers on the online purchases they drive seems like an interesting solution. By doing so, these businesses might be able to reduce capital needs and increase the number of skews they carry. I also think by providing this kickback to offline retailers, a new entrant in the online comparison shopping space could gain market share on the existing players at relatively low cost. After all, I would suspect the offline retailers and their salespeople would be more than willing to promote this type of site in a number of interesting ways.