Big boxers have a (not-so) secret weapon in the online sales wars. They just need to use it…

by

Owen Thomas of Business 2.0 sent me an interesting article last week that reveals big box retailers are losing the online battle.

Apparently, when consumers search for items to purchase online, their search results are 6x more likely to point them in the direction of internet-based retailers than traditional brick and mortar stores.

That news shouldn’t come as a total surprise. Despite the drastic improvement of retailers’ e-commerce presence over the past 5 years or so, they’re still the new kids on the block when it comes to acquiring online customers. You tell me who should be better at organic search marketing — Amazon or OfficeMax?

What’s more interesting than the obvious answer is the idea of how big box retailers can strike back: Instead of simply trying to beat the e-commerce giants on their own virtual turf, brick and mortars should leverage what may be the most non-obvious of their weapons in the e-tail battle: the store itself.

The local store is a feature the vast majority of e-commerce beasts, by definition, lack. But why is having a store presence valuable in internet land, the world where store shelves are imaginary? Because having a store (or several hundred) means your products are physically much CLOSER to your customers, and therefore can potentially be delivered much more quickly.

If you’re living in San Francisco (or Boca Raton for that matter), how can you get an HP 5610 DeskJet printer faster — by having CDW ship it overnight from a central warehouse in Illinois, or by having it delivered in 4 hours from the nearest big box store?

Unless you live in rural Montana or Alaska, the answer is fairly straightforward. With LicketyShip leading the way in store-to-door delivery, as long as there’s a big box retailer within 25 miles of you, its like having a distribution center in your own backyard. Having product forward deployed in every major metro across North America is a feature that no pure online seller can yet match. And the big boxers who’ve got it should flaunt it.

The obvious follow-up question: “What about price?”

Sure, e-tailers will oftentimes have lower prices for products. In our HP printer example above, CDW weighs in with a price of $134.99 for the same printer LicketyShip found at a local store for $159.99. So it may seem the clicks beat the bricks, right?

Wrong. Remember, you still have to have the less expensive printer shipped to you from ILLINOIS. CDW offers FedEx standard overnight service to San Francisco for $56.10. LicketyShip offers 4 hour service direct from the store for $9.99.

So all in, it’s CDW + overnight delivery: $191.09

Or LicketyShip + 4-Hour Delivery: $169.98

Shocking, no?

The local store makes the difference. Of course, same-day delivery is a faster, premium service; it just happens to be an added bonus that in many cases, it’s less expensive too.

And that probably makes sense – jet fuel isn’t cheap… 🙂

————
Update: Owen has pointed out that $9.99 is our current sale price for 4-hour shipping, not our regular price (which is $19.99). Good catch! So to clarify, if we weren’t running a sale, our all-in price for the example above would be $179.98, which is still lower than the $191.09 price at CDW.

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11 Responses to “Big boxers have a (not-so) secret weapon in the online sales wars. They just need to use it…”

  1. Steve Jing Says:

    I’ve actually thought this same idea for a while. When I search for items online, I always enter my zip code to see if a store near me has the item in stock. When they do, I almost always buy the item online, then go pick it up at the store.

    I usually don’t mind paying a little more too, even though I’m kind of paying the store NOT to ship my stuff 🙂

    The killer ap here is the ability to cut out my trip to the store. I’d happily pay more than overnight shipping rates for that convenience. I’d probably just put it on the business card anyway.

    I am a little disappointed you can’t serve more cities yet though. This would be ideal for when I’m away on business and need something in my hotel room or on site. It seems that if you can do this in one city, you should be able to do it in more pretty easily. Why aren’t you?

  2. Jeffrey P Says:

    I bought a big plasma at Best Buy 2 months ago and they couldn’t deliver for a week. Obviously I wanted it the same day I bought it, but I didn’t have a car big enough to fit it. Could Licketyship pick up and deliver something like that? With the super bowl coming up I bet a bunch of people would be willing to pay. I don’t see any plasma TV’s on your site though.

  3. Christopher Says:

    I saw you guys on the yahoo tech blog this morning and bought a router to try it out. I clicked place order at about 11:20am and the courier showed up at 1:10pm.

    I’m not sure how you’re making money, but I hope you’re around for a while! Keep up the good work!!

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