The Click & Mortar Revolution: Brick and Mortars Get Serious about Going Online

Bobbin, August, 2000 by Jules Abend

Not only that, industry watchers say that shoppers, witnessing the failures of dotcoms, are leaning toward recognized, reputable companies that are anchored in brick and mortar to ensure that they'll get what they ordered.

For Stores, It's a Learning Curve

Whatever advantages the brick-and-mortar retailers may possess, selling online presents a learning curve for them as well as for the dotcoms. Companies need to figure out how to deal with fulfillment both for their reverse and forward supply chains, unless they are also in the catalog channel.

Sherman spells out the difference in the way product handling and logistics have changed with the advent of the Internet: "We used to deal with full truckloads and full pallets. Then in Quick Response [QR] we were dealing with cases, less-than-truckload. In the dotcom world, we're looking at parcel management, item picks. We used to ship 400 to 500 locations. Then in the QR days we started shipping to 5,000 to 6,000 locations. In the dotcom world, you may be shipping to 80 million locations."

To understand the importance of a supporting supply chain infrastructure, you only have to look at the highly publicized failures of Toys R Us' online shopping venture last Christmas, when the company was unable meet the demand of its high online sales in time for the holiday. That experience showed that there's a lot more to e-tailing than putting product photos on a Web site.

From a supply chain perspective, however, there is some evidence that department stores are beginning to make strides in the online race. Don Gilbert, the National Retail Federation's senior vice president of information technology, expects most traditional retailers over the next few years to move toward an IT-based model that embraces the Internet.

Under this model, there will be intranets within the stores, with point-of-sale (POS) systems that are browser-based for access both in the stores and in homes. These POS systems will connect to the headquarters location and the distribution center as well as to extranets at manufacturers' facilities and at financial institutions.

This integrated system will greatly facilitate the flow of inventory, information and funds, allowing stores to measure total business as well as e-business, gather information about top selling products and underperformers, fulfill orders and replenish goods, says Gilbert. Federated Department Stores and a number of the association's other members are going this route,

Clearly, the path to online Internet selling is wide open for brick and mortar retailers. To succeed, they must develop an online strategy that leverages their existing infrastructure while complementing, rather than cannibalizing, their main walk-in business.

Jules Abend is a Bobbin contributing editor and editor in chief of Clarion Inc., a Howell, NJ-based international news gathering organization.

Established Business Makes E-tailing Easy for Eddie Bauer

For the $1.5 billion Eddie Bauer, its 500-plus brick and mortar stores and well-established catalog business have been anything but impediments to creating a strong Internet presence.