Thanks for that post GWM. It seems to me you make 2 valid points, first that catalog retailers are going to benefit from the web by increasing their customer base (dramatically) and removing the cost to produce the expensive catalogs. Yes I totally agree with this. This is sort of the "specialty item" class of internet purchasing. When you want to buy some specific goods and its almost impossible to locate these items in a retail store - I experienced this recently when I needed to buy a fishing pole (is that what they are called) for a relative, this guy is an expert fisherman.... without the web, there would have been no way I could have found that item, not even sure I would have attempted to buy it at all. I would have had to buy some specialty magazine, look at the ads in there, called the stores etc. So the specialty retailing business model has improved dramatically with the web. Specialty retailing stocks are worth a look imo as web plays.
With regards to your point about groceries and soft goods etc, you are also correct. Today these things are spontaneous purchases and obviously its going to be tough to change those habits with the customer base. Maybe thats why ppod doesnt have the returns that ebay does... but, I think the potential exists for it to change. BTW these warehouse stores like Costco sell goods that are not really spontaneous, ex. an entire case of something, paper towels etc, nobody wakes up and says, "gee I need paper towels, Im going to costco to buy a case of them".
I just hear this argument too often that "women like shopping, the web will never replace that". That argument only works for Nordstroms is my point. Also I believe logistics software can dramatically improve the cost of sales if we eliminate some parts of the distribution chain with the web-based home delivery model ala Dell. Ill look into this though because we usually promise 1-2% cost of sales improvements but with groceries and cpg in general the margins are so low that the model might not make sense. Ill get back to you on that.
Michelle
BTW I only own yhoo in this managed acct I have - its 20% of his portfolio. Im looking at playing this one a little bit on my own but its a totally different beast than any other stock Ive ever owned so Im reading Jans trades to try to see what to do. We had speculation in dbms/ERP (once) but nothing like this. Of course, when I go long the speculative bubble will probably burst! |
