We've decided to do an online store, for fun and profit. Here's the debate, which has been going on since April. Do we brand an online store with our Black Diamond Games identity or do we use a separate identity? Sounds simple, right?
The problem with having an online store is that people expect discounts on products. We had a branded online store for the first two years of our brick and mortar store, at full price, and it resulted in almost no sales. The catalog of available products was from a distributor, so it actually had far more selection than our brick and mortar store. It didn't matter. So great, create an online store with a discount. It's thought an online store can discount as much as 20% and still be in good shape. Fixed costs are low. This ignores the fact that online discounters are crushing brick and mortar, but for the first time it acknowledges the full reality of retail sales. Also, let me be perfectly clear that a brick and mortar store, especially in California, cannot survive on anything less than full retail pricing.
The argument against a branded store with a discount is that it will erode brand identity. It will be offering one deal in one location and another deal in another. People will ask for the online discount. The solution, so far, is to offer something middle of the road. For example, if you have an online store that offers a 15% discount and requires you pay shipping, so you can't pick it up in the store, there is less incentive to divert your dollars from the brick and mortar store. Then you focus on things you can't get elsewhere, like a well cataloged used section or liquidation merchandise.
This whole stealing your customer argument has problems, I think. It assumes that a) customers are buying from you out of loyalty, since they can clearly buy things online cheaper elsewhere, kind of counter-intuitive. and b) that there are strict lines in the sand of where people buy things, and that nobody who ever shops brick and mortar buys online too. In other words, couldn't you recover some of your lost sales that go online from existing customers?
The best argument about a branded store is probably the notion of retail purity. Many, many brick and mortar stores have an online store, usually not branded with their identity. It's secret as it erodes their ability to argue about brick & mortar. By not having an online store, you can wave the flag of the old school FLGS, tout the value of community, whether believed or supported, and generally put yourself on the left side of the tally sheet marked "solution", rather than problem. The genie is usually mentioned at this point, and that it's been out of the bottle for some time.
So why do a branded store at all? We have a brand identity and spend thousands of dollars a year on marketing. A stupid amount of my energy goes to that brand, including this blog. Starting over with a separate identity is monumentally hard, and ironically, would hurt the brick and mortar store as I divert energies towards marketing this new project. That's the biggest risk. Of course, if we decide against a branded store, it means you'll never hear about it from me. The big fear is erosion of brick and mortar sales.
You may now throw rotted vegetables in my direction.
