February 28, 2018

Cross-Shopping

Amazon and Department Stores and Catalog Holding Companies all have significant advantages over the rest of us ... they have the advantage of "cross-shopping".

One of the ways to solve the low-cost / no-cost customer acquisition problem is to encourage cross-shopping. The catalog holding company avoids co-op taxes by mailing a customer from Brand 1 a catalog from Brand 2, trying to get the customer to buy from multiple brands.

The solo cataloger or solo e-commerce brand is at a distinct disadvantage ... they don't have the cross-shopping opportunity, so they pay taxes to co-ops or Google or Facebook.

The retailer used to have a cross-shopping advantage (the mall) ... but as many malls die, cross-shopping dies with it, causing even more store closures, causing even less cross-shopping to happen.

Amazon is re-defining cross-shopping ... and they get all of the benefits. They are doing to e-commerce what Wal-Mart did to Downtown America.

Think carefully about what is required to allow your company to enter the cross-shopping realm, especially if you are a standalone company.

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