Shopping From Virtually Anywhere
At the turn of the 21st century, the development of the internet has allowed for crucial innovations, one of which is online shopping. These days, online shopping is an everyday activity people engage in, and has become a major source of consumer expenditure. Moreover, the growing demand in online shopping has created an opportunity for a manufacturers to sell their products to consumers directly without having to go through a retailer. This mutually benefits consumers and manufacturers because the manufacturers now have a higher producer surplus, for they can increase their selling price, and in turn consumers now buy at the manufacturers price, which is lower than the retailers price.
Furthermore, amongst the growing trend of online shopping, smaller manufacturers have found that a very effective business strategy is to first establish an online store, then after growing demand of the products, establish a physical store. This is because at the end of the day, the majority of consumers still want to see and feel the products physically.
Lee Broom successfully opening his first physical store in Soho, New York.
A British designer, Lee Broom, successfully executed this business strategy, when after he had been selling his products through his online store, he decided to open a monthlong popup store in Soho, New York. According to the NY Times article, his temporary store was extremely successful in which, “his sales in the United States jump by about 50 percent.” In the article Mr. Broom also said that “It went incredibly well” and “people want to see the pieces in person, get the scale, look at the materials and touch them.” After the success in his temporary store, he decided to open his own physical store near the area. Many small manufacturers, similar to Lee Broom, have adopted this business strategy and have seen a tremendous growth in sales.
After reading JiaYu’s blog post concerning Alibaba’s recent success, and about her position on online shopping, I have came to a conclusion that the business strategy I mentioned above, would only work in developed countries like the United States and Canada. This is based on the approach JiaYu had of online shopping where she says that online shopping in China is successful due to the fact that “many people in remote areas do not have access to some products in physical stores, while online shopping has given them a perfect way to solve that. But in Canada, people mostly live around big towns, so it is convenient for them to drive their cars to get what they want.” The reason this business strategy will not work for countries like China is because in China, online shopping acts essentially as a solution to the problem of consumers lacking the ability to travel to physical stores.
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Works Cited
McKeough, Tim. “Clicks to Bricks: Online Retailers Find the Lure of a Store.” The New York Times. N.p., 10 Nov. 2016. Web. 13 Nov. 2016.
Cao, JiaYu. “Can Alibaba’s success in 11.11 be duplicated in Canada? | JiaYu’s Blog.” JiaYuCao Blog. N.p., 13 Nov. 2016. Web. 13 Nov. 2016.