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Do you let the fox into the hen house? (What if it buys a ticket?)

Do you let the fox into the hen house?  (What if it buys a ticket?)
The etail marketplace has siphoned sales away from physical retail stores and put downward pressure on retail price. With that in mind, is your store better off to avoid carrying brands that are born and grow online?

I read an interesting story in Retailing Today about the dilemma faced by a number of stores, including BJ’s Wholesale Club, Home Depot, Staples, Sears, Brookstone, Fred Meyer and others. They all compete with Amazon (as if anybody in retail doesn’t these days), but they have decided to carry the Amazon Echo. (The story can be read here.)

The Echo is an interactive device that, in response to voice commands or questions, will provide news, information, scores, forecasts, music, etc. In full disclosure, I got one of the first ones that was shipped from Amazon earlier this year and absolutely love it. As my energy levels and tasks shift and change during the day, I tell it which genre of music I want in the background and it adjusts easily as can be. Information about the weather and news are only a query away.

However, this is more than an information and entertainment device. It can be used as a voice-activated order device to place orders with Amazon. Wow! Saying “Echo, order Organic Widgets” can start the process for the widgets to be on your front door in 48 hours! (Note to self: Do not read the Christmas list from the grandchildren out loud.)

As the article points out, carrying this product may produce some nice sales for the retailers that are opting to do so—but at what cost? Or, are these short-term sales ones that will cost these stores in the long run? Is it a tactical and strategic mistake to sell your customers a tool that makes it easy to order from your competition? That is a question that only they can answer, and it is one that I assume that they have considered carefully.

So, why is this subject in a blog post focused on the needs of natural products retailers? Don’t you face these same issues when you carry a brand that is heavily promoted online? Maybe there is a short-term sales gain while that brand is still hot, but does it last? Over time, will those looking for that brand just buy it direct online, where prices can and probably will be lower than yours? What about your current, loyal shoppers who will be more heavily exposed to that brand if you bring it into your store?

Obviously shoppers know that they can buy products online. The consistent growth of that channel is proof of that. In addition to siphoning sales away from physical retail stores, the etail marketplace has put steady downward pressure on retail prices for some time and that is likely to both continue and intensify. With that in mind, are you better off to avoid those flash-in-the-pan brands that are born and grow online? Or are you better to carry them while they are hot and move on when they cool down? There is something to be said for sales, even short-term ones, and customer service.

There are points to be made for either way of answering these questions. While I am not certain that either way is better than the other, I am certain that you will have to answer it at some point. I’d love to hear your thoughts about how to best handle these situations.

Do you offer brands that are heavily promoted online, or do you avoid them?

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