business news in context, analysis with attitude

by Michael Sansolo

While I might disagree, I can fully understand the sentiments of MNB readers who think we focus too often on e-commerce and especially Amazon. They suggest that we are overhyping the threat, overpraising the possibilities and overlooking many flaws in the entire process.

But even if you assume that everything we write here about e-commerce is wildly optimistic about its potential, the worst that happens is that we look silly. It wouldn't be the first time. It won't be the last. But that's about it.

But if we're right - or even half right - the implications for industry are much greater.

There's no simple choice when deciding how to address the e-commerce threat. No matter what path you take, the potential financial and competitive risks can be significant.

But here's the important thing to know: Not acting at all creates even greater risks for the business, potentially putting them on the path to irrelevance and ruin.

That’s no small problem. And I don't think I'm overhyping it.

Consider a quote from a Wall Street analyst that appeared in the New York Times last weekend, as he commented on Macy's decision to close 100 stores.

“Given the convenience of e-commerce, the consumer needs a really good reason to go to a store and park their car.”

Athletes talk about something called “bulletin board” material - quotes from opposing players that irritate and motivate them at the same time. So they hang these quotes on a bulletin board as a constant reminder of the need to act.

That's exactly what traditional retail businesses ought to do with that analyst’s quote.

Read it again:

“Given the convenience of e-commerce, the consumer needs a really good reason to go to a store and park their car.”

Like pundits who write for online news and information sites, analysts can be wrong. They read the situation based on how they perceive benefit, not necessarily how shoppers or even businesses are acting. But they also can be right ... and their opinion matters, if only because it can impact perception, which can affect financing issues.

And so businesses have a choice. Act or not.

Let me repeat. Not acting at all creates even greater risks for the business, potentially putting them on the path to irrelevance and ruin.

“Given the convenience of e-commerce, the consumer needs a really good reason to go to a store and park their car.”

You may read this statement as hyperbole, or as simple statement of fact. You have that choice. Either way, I think retailers should post this quote in board rooms and lunch rooms, reminding us that consumers also have a choice - they can always go someplace else to do their shopping.

It just so happens that we think more and more, they'll be choosing to go online.

Though we could be wrong.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
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