Related to our recent classroom discussions of online
retailing, the NY Times featured an article on how boutique stores are
leveraging online sales to thrive in the “long tail.” While online behemoths
like Amazon seem largely impersonal (but cheap!), online boutiques are trying
to carve out a relationship-focused niche online, even if prices are higher.
This requires intense focus on logistics and willingness to
connect with customers multiple times, in personal ways, all for a single sale.
The challenge for boutiques online remain similar to those faced by retailers –
showrooming. As the Times quote explained from a boutiquer:
“A customer whipped
out her phone and asked me if I could price match a pair of Swedish Hasbeen
clogs with Amazon,” said Ms. Mautz, who did not match Amazon’s price (the
customer bought them from her anyway). “It makes me feel like what I need to do
is become more specialized, find smaller, newer lines, and get more things that
no one else has.”
The challenge online will be whether boutiques can continue
to try to differentiate via traditional “tangible” channels – customers being
willing to pay more because of higher quality goods, increased personalized attention.
While there may be a small market for these goods, I think boutiques will have
to get very creative in order to maintain high margins on the internet, and
that the business plan could only make sense for uber-high margin products
(since moderate margin products would be too difficult to differentiate from
Amazon, or too expensive to provide online expert customer service as compared
to smaller margins).
Perhaps these boutiques will become increasingly creative
on “tangible” experiences – mailing fabric samples to entice customers to items
they might not have been aware of, high-tech online camera fitting rooms,
flying a boutique representative to major buying hubs to personally visit
shoppers (or allow shoppers to sign up for personal visits/consultations so
that it doesn’t seem too stalker-ish).
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