Here we go again! The much-hyped buy.com is trying to buy a stake in the hearts and minds of online IT buyers.
I'm starting to feel like a broken record when it comes to the antics of our retailers/e-tailers, but their approach to business intrigues me.
What do you think of the term "Internet economy"? I believe when it comes to retail or e-tail the Internet economy is at its greatest point of convergence.
The argument in retail says a buyer brings the same mindset to Net purchasing as he/she does when walking into a shop - the need for great service, competitive pricing and choice. A PC or IT product buyer does not neccessarily care where they purchase what is essentially a commodity.
Gerry Harvey's greatest argument against the Net is Australian consumers still like the real-world experience. That's fine if you're buying a sofa and need to check the comfort factor, but a PC is a PC.
(By the way, read my argument with Dell on page 36. I still think e-tailers offer better choice than Dell.)As I've commented before, the problem with bricks-and-mortar retailers like Harvey Norman is the crippling effect of a franchise structure that does not accommodate centralised purchasing over the Internet. Sure, IT business is good for them now, but in two years I'm not so sure.
Meanwhile, the rush to stake out a commercial "spot to shop" on the Net, as buy.com so aptly put it, is only getting more frantic as the year goes on.
The thing I must admire is the approach the Internet economy uses which runs along the lines of, "If we build it, they will come", (after millions of dollars in advertising costs, mind you).
In talking with buy.com's partners, including e-loan and RentSmart, at its launch party last Thursday night, it's clear there is enough energy in the industry to support the e-tail business model. What's curious is that consumer confidence is still the missing link to its success.
It seems as if buy.com and its online competitors are just waiting for a light bulb to go "bing!" in the minds of these all-too-lucrative SME buyers.
The tech stock crash of late probably didn't help the image of Internet-only companies. The risk is not only will people be wary of trusting online merchants with credit cards, but trusting them with their business at all, because the already-wavering public confidence in IT is now even more shaky. buy.com's promise of 20 per cent discounts and good service should help the cause, but the pricing war will be another issue the retail/e-tail world will struggle with over the coming months.e-tailers, like no others before them, must rely on partners for everything from product supplies, marketing, IT support, call centre support, and most importantly, distribution.
I can imagine the big distributors involved in supporting e-tail businesses would be worried about looking after traditional retailers. Certainly in Dataflow's case, concerns over this conflict of interest was behind MD Geoffrey Tobias' decision to resign from the board of software e-tailer smartbuy.com.au recently.
Dataflow must be sensitive to the competitive needs of all customers, be they resellers, retailers or e-tailers.
Watch out for more retail channel conflict, and excuse me if I have to fly the dot-com flag again. I can't help it, I'm starting to get click happy.