According to L2 Founder Scott Galloway, pure play E-Commerce doesn’t work. Galloway cites examples of large online retailers like Amazon that are struggling with keeping warehousing and shipping profitable. He remarks that bricks and mortar companies are still trying to figure out what their online presence should be, and online pure plays are still trying to figure out what their bricks and mortar presence should be.
My opinion is that organizations need to remain true to their core product distribution model. Regardless of whether we are discussing a titan like Amazon, or small business, companies need to use the internet to become more efficient and not necessarily replace their strategy.
If your product is information, or brokering a transaction, perhaps you can get away with being an internet pure play. But if you have physical product the Internet may only represent a way to become more efficient. Where are the bridges for online and offline? For Amazon or Google Shopping Express, the Internet is all about how they can make their product delivery more efficient and minimize warehousing. Automation efficiencies are worth a lot here. But online is solely used for product information.
Most B2B organizations are looking at their online presence as a lead generator. If their product isn’t software or information it is probably a physical product, service, or combination of both. B2B companies just want more leads from their Web site.
To Galloway’s point, most B2C product organizations need to determine what their physical world touch point is going to be and how to become more efficient with fulfillment. Then, how can the internet be used to make that experience better? If your a B2C company that sells through channel distributors, how can you equip your channel partners with excellent sales tools? What is your digital marketing strategy going to be? How will you complement advertising efforts and avoid the all-too-common advertising cannibalization scenario?
Relying solely on the Internet works for very few business models. Product or service fulfillment typically happens in the physical world. How can the internet help your organization make that a better experience?