Posted on June 20, 2014
By now it is old news that Amazon “killed” the bookstores. We all know that bookstores are closing left and right. It is easier to buy books on the internet.
The banking industry is in trouble too. Mobile banking is on the rise and those banks that lag behind, which fail to become mobile, will inevitably disappear.
But the impact of the internet is far greater, way beyond books and banking. I have only to look no farther than my family. My daughter buys all her food products in volume through the internet, while my wife recently bought our college age son’s apartment furniture, not in a department store, but, yes, on the internet.
It does not stop there. No one goes to rent a movie from Blockbuster anymore. Netflix and other internet services have taken over. And Blockbuster is gone.
This is a revolution, and more companies will bite the dust because of it. And they will be replaced by an internet service.
What to do?
The first solution is an obvious one: join the party. Build your own e-store to sell your products on the internet.
Is that enough? Maybe. If it is not enough, and you want to have a face to face presence while engaging in live selling, then you must find an answer that challenges the competition in this new medium.
What should it be? Widen the product line? I do not think so. Because it does not have space limitations, the internet can provide an even bigger portfolio of products.
Cheaper priced products? The internet can match, if not undermine, this strategy. Its costs are lower since it does not require expensive real estate and it is reaching out to a massive mass market.
Better, faster service? The internet has a competitive advantage here as well. It can organize distribution and fulfillment far more effectively, and interference from the human element (and the concomitant errors) is minimized.
What to do then? What is it that face to face real time selling can provide that the internet can not?
Take movie houses. There was panic when television became ubiquitous. The fear was that the movie houses would go bankrupt and disappear since anyone could now watch films from the comfort of his or her home.
Now if you want to see a movie you can stay home and save yourself the pain of driving and fighting traffic in an effort to reach the cinema. And there is no need to search or pay for parking.
So what happened? Movie theaters converted themselves into cinema compounds with multiple projection halls that provide extra service: You have a very comfortable chair and a button to summon a waiter who will serve you drinks and some food. The screens are enormous, and there is surround sound second to none.
Going to the movies now consists of more than watching a movie that is available at your home. It provides an experience you cannot have at home.
I would go even one step further. If it were me running the cinema company, I would have in the cinema compound a first class restaurant and live jazz music so that people could eat before the movie starts, or head for drinks and food afterward.
I would add multiple booths in the lobby. One with an astrologer. Another one with a palm reader. A third one who reads coffee deposits from your mug while a fourth analyzes your physiognomy. So when you go to the cinema you are going to have a unique experience, one that adds up to more than simply watching a movie.
If you want to compete with internet sales beyond just having your own internet channel, then think long and hard about ways in which you can make your outlet an experience.
Southwestern Airlines tried something along those lines. It made flying an experience. The more exciting and engaging the experience, the more likely the clients will prefer your delivery to that of the anemic internet.
Dr. Ichak Kalderon Adizes