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Clicks and mortar
 
The future of retail is a hybrid 
 Tuesday, 1 February, 2000 
Late last year the marketing director of leading UK book retailer Waterstone’s up and left suddenlyafter four years in the job. Why? The arrival in the UK market of online booksellers Amazon.comand Barnes and Nobel. He’s not alone.
 
A glance at the statistics is enough to make any bricks and mortar retailer blanch. The BostonConsulting Group estimates online retailing in North America topped $US36 billion last year.Procter and Gamble has built up a global brand business through traditional channels but now it’sploughing $US50 million into reflect.com, its first totally online beauty business. And it’s allbecause P&G chief executive Durk Jager “wants to learn how to sell personalised products andservices online”. He knows he has to.
 
In the US, Internet advertising spending is projected to eclipse magazines within four years. TheInternet has turned serious and so should traditional retailers. But before you charge ahead andflip your business from “bricks and mortar” to “clicks and mortar” ask yourself these questions.
 
As a New Zealand-based retailer, will you have the muscle to compete with global.com retailersoffering goods at cheap prices? Do you want to? Will it undermine what your real-life shops areabout? Be sure you know why you are moving online, even if waiting hurts you in the short term.
 
The fact is, there are a number of different approaches to this e-tailing thing. While crustycatalogue sales giant Sears hopes sears.com will spark a revival in its sagging fortunes (and itmay), some nearer-to-home early adopters of e-commerce are actually getting out of the game.They’re doing what? That’s right, bookseller Whitcoulls is closing down its online business and willinstead sell books online through Eric Watson’s new retail “supersite”, FlyingPig.co.nz. Whitcoullshas bought into FlyingPig’s view that off-line retailers should not get into online retail because theyare two different businesses. Let FlyingPig do it for you.Will moves like this kill off bricks and mortar retailing? No. Cinema didn’t die when videoappeared, though it suffered because it took time to adapt. So here’s what retailers need to do.
 
1. Understand your competitive advantage
 
2. Amplify
 
3. Embrace technology to do it
 
For high street clothing retailers the key competitive advantage is experiencing the product. That’swhat they have to make the most of.
 
Next step, amplify that advantage. Levi’s knows this. It’s been suffering. In the 1998 financial yearit suffered a 13% decline worldwide. In the US its market share once topped 30%, but has nowslipped to 14%. Its new weapon is to refit its stores and make them a “total experience”.
 
Its new UK flagship store features a “chill-out zone” with Internet access and a cinema screen thatcan be converted into a shop within a shop. Levi’s plans to allow independent record labels in-
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