Monday, January 11, 2010

Do Small to Mid Size Retailers Need a Web Presence?

Reading between the lines of a New York Times Article entitled, "The Gloves Come Off at Amazon and Wal-Mart" by Brad Stone and Stephanie Rosenbloom clearly answers with a loud YES. It seems that Wal Mart got into a price war with Amazon. Now, why would the largest retailer in the country, with sales of approximately $437.6 billion (according to the article) be worried about a significantly smaller company.

The answer is simple. Wal Mart is worried that Amazon, due to their online presence, is slowly increasing their market penetration. As Fiona Dias, executive Vice President was quoted by the Times, this is "...part of a greater strategic plan. They [Wal Mart] are not going to cede their business to Amazon."

What is especially interesting is that the Amazon's demographics is different than Wal Mart's. The former caters to affluent urbanites while Wal Mart owns Middle America. Again reading the fig leaves, if Wal Mart is so worried that a company less than 1/10th the size with a different demographic illustrates the increasing inroads online sales are making into all facts and all demographics of retail trade. Otherwise, why would Wal Mart be competing so vociferously against Amazon?

The skinny is you better have an online presence with a robust website that does more than have a few static pages. The days of retailers to open up shop and wait for the people passing by their shop is long gone. Due to the Internet, there really is no geography. It is a competitive landscape and the internet has changed the rules of the retail game.

Read a companion piece I wrote Why Small Businesses Need the Internet.

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