Bricks vs Bits

Bricks vs Bits

I’ve just completed a long overdue clearout, selling off old PDAs, games consoles and other knickknacks in a bid to lessen the financial impact of Christmas. In the event it was so successful it covered the cost of all my Christmas presents and will even pay for a few beers.

The values of all the tech items I sold were fairly predictable, just from watching a few auctions of similar items and getting a feel for the price. I was pleasantly surprised at the value fetched by a few museum pieces (Apple PowerBook 5300c anyone?), but what shocked me most was the price paid for a pair of shoes.

I had bought a pair of designer hiking boots at an outlet shop for just £20, worn them once and realised they were just a millimetre too small for my fat feet. Their eBay selling price? £45.

I shouldn’t have been so surprised. I bought a designer t-shirt — again at an outlet shop — for £10 a couple of years ago and sold it online for more than twice that to a guy in the US.

Both incidents could be sheer good luck on my part, and I have yet to test this effect empirically, but it does seem that certain items go for more on eBay than they do in the shops. There might be a business model there somewhere, buying up cheap designer goods and selling them online. But first I want to know why it happens.

I have a few theories, and I think they give us some insight both in to the mind of the shopper, and perhaps the future for shopping:

1. Value-Brand Rejection
I’m sure there is a proper term for this, but it is pretty clear that some people just don’t want to be seen shopping in ‘value’ shops — TK Maxx, Aldi etc. I can understand it. I shop for nice clothes in cheap places and would be quite happy for most people to believe I paid full price for the apparently expensive outfit I might be wearing. Status is important to all of us, but some of us are shallow enough to measure status by where we shop — or at least be concerned that others will judge us that way. Hence when people want a bargain, they would rather buy it from eBay than risk being seen hunting down that bargain in person. They might even admit it — getting a bargain on eBay still has a certain cachet.

2. Convenience
There’s no arguing with the web for convenience, certainly when compared to the jumble sale that is most ‘value’ clothes shops. If you are looking for a pair of hiking boots and find them at half their RRP you are bound to think they are a bargain — especially as they will be delivered to your door.

3. Reach
eBay has more than 10 million users in the UK alone. That is an incredible audience against which to market a single item. And the chances are that even if it is a niche item you may well find a buyer. The t-shirt that was neglected in the outlet store until its price fell to £10 immediately found a number of interested people amongst the millions searching online.

If my theories are accurate, then how will they affect shoppers and shops? People’s rejection of value brands is unlikely to change, although there will always be some that overcome the issue (‘Pradamark’). People will always appreciate convenience too, although this is balanced out by the social aspects of shopping and the need to try clothing items on.

Reach is what is key: the reach of the Internet retailers. People are getting more tech-savvy, and Internet access is increasingly ubiquitous. Hence there is likely to be a bigger audience for online shopping from home, and as bandwidths increase and technologies improve, the home shopping experience will become richer. Think virtual reality or 3D screens; webcams that can accurately size you up and deliver an onscreen representation of how you might look in a certain item.

But it is the reach of the internet in to the high street that will cause the biggest change. Once you have enjoyed the social aspect of shopping and tried the item on, why pay the full high-street price for it when you can find a better deal online? Even if the feted municipal WiFi networks don’t take off, there will soon be limitless bandwidth available to your smartphone. A built-in RFID tag reader (to capture information about the product without typing it in) would enable you to very easily run a price-check online, and even allow you to order the product on the spot from wherever you might find the best price.

I’m already trying this approach for electrical goods and computer parts. It is clunky without the RFID reader, and slow and expensive over GPRS. But it works, and has saved me money on a few occasions where I have ignored a tempting high-street offer when I have found a much better deal online. Ignoring the thrill of the impulse purchase is tough, but when there is more than a £10 price difference, it is easy to justify. And it also makes you feel pretty smug. I think that could be enough to make this a popular approach.

This could be the start of a real war for customers between the shops with bricks, and those with bits.

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This article is by Tom Cheesewright. This post forms part of the Future of Business series. For more posts on this subject, visit the Future of Business page.

Tom Cheesewright

https://tomcheesewright.com/futurist-speaker

Futurist speaker Tom Cheesewright is one of the UK's leading commentators on technology and tomorrow. Tom has worked with a huge range of organisations across a variety of markets, to help them to see a clear vision of tomorrow, share that vision and respond with agility. Tom draws on his experience to create original, compelling talks that are keyed to the experience of the audience but which surprise and shock with unexpected facts and examples.

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