Amazon and eBay: Retail Killers Or Fighting for the 6 Percent?

Clearly, and eBay are major — and aggressive — price-oriented online retailers. And yes, they have clobbered some store retailers’ profit margins and driven many store retailers out of business. And yes, they are competing with each other as well as other retailers.
But, despite the prowess of such successful online retailers, is store-based retailing really headed to the graveyard or dinosaur status? As Mark Twain once said: “The reports of my death have been greatly exaggerated.”
The most underwritten-about statistic in all the stories about online retailers clobbering their store-based counterparts is SIX PERCENT. This is the value of total U.S. retail purchases completed online. Guess who generates 90+ percent?
Consider these observations by Jeff Himmelman, writing for the New York Times
“For some time now, physical retailers have lived in fear of the various ways in which Amazon can undercut them. If you’re looking for a product that you don’t need to try on or try out, Amazon’s customer analytics and nationwide network of 40-plus enormous fulfillment centers is awfully tough to compete with. And even if you do need to try something on, Amazon conveniently includes a bar-code scanner in its mobile application so you can compare prices while you’re in a store and then have the same item shipped to your home with just a few clicks.  Amazon holds such sway that for many it’s the default place to buy things online.”
“And yet online commerce currently accounts for only about 6 percent of all commerce in the United States. We still buy more than 90 percent of everything we purchase offline, often by handing over money or swiping a credit card in exchange for the goods we want. But the proliferation of smartphones and tablets has increasingly led to the use of digital technology to help us make those purchases, and it’s in that convergence that eBay sees its opportunity: ‘We view it actually as and. Not online, not offline: Both.’’’
Click the image to read more from Himmelman.

Photo illustration by Grant Cornett. Prop Stylist: Janine Iversen.


This entry was posted in Online Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer, Part 8: Putting It All Together and tagged , , , , , , , , . Bookmark the permalink.

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