September 27, 2007

E-Commerce: More Like Direct Marketing, Or More Like Retail Stores?

Had a discussion this evening about the future of e-commerce.

One of the topics was "which business model has the best chance to succeed, long-term ... catalog/online, online pureplay, online/retail". I vote online pureplay, followed by catalog/online. I simply don't buy the "multichannel" stuff we're fed by vendors and research report writers.

All of us who actually are asked to measure retail/online customer dynamics know the real truth ... retail customers are not likely to cross-over and buy online ... whereas online customers are very likely to buy in stores. This means the online/retail business model is ultimately dependent upon retail success ... and retail has way too much square footage for all retailers to be healthy.

One could ask a more interesting question. Is e-commerce more like traditional direct marketing, or more like traditional retail stores?

I argue that e-commerce is more like traditional retail stores. Traditional direct marketing is all about identifying an audience, then blasting a message to the audience. E-commerce (outside of e-mail) depends far more on the tenants of retailing than direct marketing. For e-commerce, Google is the mall owner.

Your thoughts?