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Worry for retailers as web shopping clicks into place
by Elizabeth Rigby
For traditional stores, online shopping has become a cause for concern in a
difficult retail environment. The Internet is accounting for more spending than
ever. In addition, it also makes it easier for consumers to compare prices across
a far bigger selection of items than a trip to the high street.
‘The way the Internet encourages people to shop about is having a big im-
pact on the market’, says Nick Gladding of Verdict Research, a consultancy.
Internet retailers have been able to offer cut-throat prices because they do not
have to bear the cost of running a physical shop.
Price-comparison website such as Kelkoo, where a shopper can compare
prices on any product from DVDs to Prada perfume to get the best deal, make
the market more competitive. ‘It is a lot more competitive online just because
you are always just one click away from a rival’, says a CEO.
Retailers selling electrical goods have been particularly hit by the Internet,
as items such as televisions and DVD players become more common purchas-
es. This creates a dilemma for retailers who sell products both online and in
shops.
Some bricks-and-mortar retailers are adopting a model of dual pricing in
order to keep their position online while maintaining margins in their shops. Mr
Gladding says dual pricing will become harder to practice as consumers be-
come better at surfing the Internet. ‘In the long run, prices must come together’,
he says.
To be successful in operating in the online and offline world, retailers
should probably try to integrate the two as much as possible. Some businesses,
for example, have set up their operation to allow customers to shop online, over
the telephone or in stores.
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