Does Brick-and-Click Success Signal Shakeout?

When it was reported yesterday that online shoppers have been forsaking pure-play e-tailers in favor of brick-and-click sites, it surely sent a shudder across the dot-com landscape.

In the report, Media Metrix showed that nearly half of the 50 most visited Web sites during the holiday shopping season had a strong brick-and-mortar presence, while few of the pure play Web sites made the list at all.

This scenario really should not come as a big surprise. After all, it has just been a couple of weeks since retail analyst Lehman Brothers Holdings predicted that holiday season failures would cause online merchants to fold or go up for sale at a rapid rate in 2000.

Is Shakeout Coming?

The fact of the matter is that, despite a tripling of e-commerce spending this year, many online merchants will find themselves falling far short of what they need to keep their virtual storefronts open.

Consequently, those businesses should expect a cool reception when they ask venture capitalists and stockholders to finance them through 2000.

However, what was really telling about the latest figures was how a hapless Toys “R” Us was able to rattle Web savvy eToys this holiday season.

Wal-Mart Has Strong Showing Old

Another amazing finding was the strong showing that brick-and-mortar giant Wal-Mart made, despite its archaic Web site. One has to wonder how much more business it will do with its revamped site — aided by an expensive alliance with America Online.

This success also begs the obvious question of what long-term effect this brick-and-click advantage will have on the likes of online giant retailer and the multitude of other pure-play dot-coms that have yet to establish an offline anchor.

Partner Or Become Extinct

It is my belief that during the first quarter of this year, pure-play e-tailers large and small will have the choice of quickly partnering with a brick-and-mortar retailer or face going out of business. As more and more offline stores launch Web sites, online buyers will have the choice of buying from branded entities or unknown dot-coms — and human nature has it that consumers will almost always go for the known quantity.

Based on the latest sales figures, it appears that no amount of clever or — in some cases — abrasive advertising by pure-play e-tailers can persuade online buyers otherwise. Must Find A Partner

For that reason, it is critical for Jeff Bezos to quickly find the right kind of brick-and-mortar anchor for now. If he fails to do so, the biggest online store could easily wind up being swallowed by an offline rival like Wal-Mart.

What do you think? Let’s talk about it.

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