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by Peter Cooper
Now imagine that another plucky shopkeeper notices how successful the first shop
is, thanks to the queues of people outside. This shopkeeper starts another general
store merely 50 meters away. He has no additional products or services to offer,
he's just another outlet. Within hours, the second shop is also full. Let's now
look back at online retail. When Barnes and Noble made a similar move, did their
store 'fill up' with 'prospectors'? No, over 80% of online book trade still
remains in Amazon's hands, and Barnes and Noble aren't servicing the entire other
20%. Why is this?
The reason the second shop on the gold rush
route may have become busy so quickly could be due to the success of the first
store. On many occasions it would have been difficult to get into the first store
and it would probably have run out of stock fairly often. By having two stores
to visit, the consumer could easily pick the one which was least busy and, in
turn, both shops were profitable. But it doesn't work like that online!
On-line
shops rarely get full, and they never appear to run out of stock! Even if they
did, you wouldn't know until you got there. The real life concept of lining up
and being held up in the store doesn't really exist on-line. There's no lines
at Amazon.com and, most likely, you'll remember their previously good service.
So, naturally, you return to them. To understand how users will change where they
purchase their goods, either permanently or temporarily, we need to see what causes
the change.
