Hi Marcos!
As a result of my over 20 years experience in the Retail business, I too have taken an interest in this company and their plans for expanding their business.
A few days ago, I also called Mark Brown and asked him a few questions. Their business model has merit, however as with everything else it boils down to their ability to execute their plans.
I remember making a presentation at our Senior Management meeting a few years back. The organization I was with did not have an Internet presence at the time, and I was hammering on the table saying that this is a market that is ripe for Bricks and Mortar businesses. I felt it could give us a competitive advantage. The meeting was called primarily to discuss what changes had to be made to address the impact of Walmart coming into over 20 of the markets where we had stores. Well, I assure you that I was looked at as a real space cadet, and the rest of my peers did not see, nor appreciate the value of what I was talking about. They had their heads down and were focusing on stemming the bleeding rather than also looking to the future, and taking the initiative to make new inroads into basically uncharted territory. Alas, the company is still grappling with the challenge of increasing their sales base, and wouldn't you know it, good old Walmart is fast becoming a Retailing Gorilla on the Internet!
The reason for this little tale, was to emphasize that I firmly believe that in order for the existing Bricks and Mortar Retail businesses to thrive in the 'connected' world, they need to establish an on-line presence. Now, I also fully appreciate that many of the existing retail businesses do not have either the staff, money, expertise, nor time to set up a quality on-line presence.
As you have pointed out, this is the market that many of the so-called On-Line malls are hoping to capture. However, the vast majority of malls seem to have a loose structure, and there seems to be a "grab as many retailers as you can" or an "overwhelm the visitors with choice" approach. What I like about this company's business model is that they are focusing on replicating a community feel for shoppers. They are building a collection of "locally known" bricks and mortar retail stores. In my opinion, the offering of choices based upon a geographical area offers a significant value add to all those involved. The collection of stores based on a geographical (city) location offers people an opportunity to support their community in what is fast becoming a no boundary 'Internet' world. I believe that people still do want to, and will support their community if they are provided with the opportunity.
I can see a vast number of benefits for the businesses involved. For example . . . they will have a chance to reach many other potential shoppers who may drive by the store everyday, but who may otherwise never set foot in their store. The ability of the local Seniors, Shut ins, and Shift workers to place orders at their local store provides a value added service that can separate them from many of their non "hooked up" competitors. If the service becomes well known across the country, then I also see people who are planning their trips taking a virtual visit to the stores before they actually make the trip to the City themselves.
There will also be many other benefits to the retailers that I won't go into depth on now - such as retrieving demographic / location information on their shoppers, the ability to target market upcoming specials to their on-line visitors, and potential for exponential reach from their advertising budget.
I also feel that many shoppers will like the central checkout service as well. I can imagine that there are many logistical hurdles the company will have to jump over to ensure that it works smoothly (such as the various levels of taxation on different products etc.). However, this difficulty could also become one of the barriers to entry for any other Cyber Mall trying to duplicate their service offering.
My recommendation would be that they need to ensure that they move as quickly as possibly to set up representatives in each of the major cities where they hope to have a presence. Speed to market is critical here. Even though the marketing of the site can (in part) be done at each of the participating stores, the company will need to have a well planned and coordinated advertising plan for getting the message out to the world (in each of the cities they are located in).
The last point that I will make is that the fee that the company will be charging for the service is not high in my opinion. Given the fact that many of these on line orders will be sent directly to the stores' suppliers as part of their normal order for pick up by the customer - or better yet, sent directly to the customer's home if Pre-Paid, then the Retail Store could stand to make significantly more money from the sale of these items than from the ones displayed in their store. On line orders require no display fixtures, sales staff involvement, staff time for arranging product presentation, etc, etc,. Add to this the added benefit of increased Store Name reach (to thousands of potential customers) and the no hassle factor of having to maintain an Internet site on your own, and I really don't see why this concept cannot grow and thrive.
However, I will state again. Having a great idea, with lots of value added services does not mean that there will be instant success. It all boils down to their ability to execute. If this company can do this, then I believe that they have a very good chance of doing well in the future.
Sorry for the long post! I got a little carried away typing it.
Crazy Canuck |
