<<<Why is selling through brick and mortar mutually exclusive to doing business over the internet?>>>
The internet is more than an efficient order-talking mechanism.
It allows the almost-complete replacement of sales people by computers.
It allows for lots of stores in densely populated high-rent districts to be replaced by a few fulfillment centers in the low-rent cornfields of Iowa and in toxic-waste sites in New Jersey and somewhere out west.
It allows for lots of information about products to be given to interested customers almost instantly, at miniscule incremental cost.
A large part of the costs with internet selling are fixed. If some company selling on the net can get very large, they can be more efficient than land-based stores.
Bricks and mortar stores require sales people. The thesis about internet stores and land-based stores being mutually exclusive goes like this.......if (OK, in 5 to 8 years) land-based stores lose 10 % of their revenues to internet stores, can land-based stores survive?
It is presumed that a 10% decline in revenues may not allow most land-based stores to trim costs much at all. If this 10% decline in revenues was formerly flowing down to the bottom line, the new bottom line implications are scary for land-based stores.
Just because I write it, that doesn't make it true. But I think this is a big part of the investment thesis that bulls buy into.
The other issue is the convenience of shopping from home whenever you get the impulse, in whatever state of dress and hygiene and sleep-deprivation and inebriation you happen to be in, without having to do something with children who get car-sick and really are not even tamed yet, etc. etc. (I know, I am projecting my own family which belongs on some other planet on the USA again. Sorry, HJ).
Long, but not for long?,
Tom |
