Tuesday, December 14, 2004

Doing Local Business Online - The Conventional World View

Bricks and Mortar Store vs Online Store — The Conventional World View

Say you want to open a store to sell widgets, and let's pretend you have a choice. You can either open a bricks and mortar retail store on Main Street, or you can open a web store and ship widgets from your garage.

Some of the differences seem obvious. At first blush, it would seem that your bricks and mortar store would probably cater to a local market with walk-in traffic, whereas your web store would focus on a non-local market. In turn, this would have an influence on how you define your service. Perhaps your physical store would focus on low prices and speedy installation, whereas your cyber-store would carve out a relatively narrow niche catering to a specialty market. What this clearly suggests is that you do NOT try to reach local markets online. You use more traditional marketing strategies.

Thinking about it in this way gives us the "Conventional World View". In the Conventional World View we have two different models. We can either open a Bricks and Mortar Store and cater to local markets, or we can open an Online Store and cater to non-local markets. Here are some other features of the Conventional World View...

In the Conventional World View Bricks and Mortar Stores deal with local markets. The products sold in a Bricks and Mortar Store are usually fairly general in nature — groceries, lumber, gasoline, dental services, child care, and so on. You normally specialize in some general area, but your specialization cannot be so narrow that there are not enough local buyers to support it. For instance, you might be able to find enough local customers for a specialty cheese store, but probably not if you only sell cheddar cheese.

Also, delivery is not an issue for Bricks and Mortar Stores. Either customers pick up goods, or you have successfully addressed the delivery issues.

In the Conventional World View Online Stores deal with non-local markets. In this case, products tend to be more specialized catering to a "niche" market spread out geographically. You are not hampered by the same restrictions as a Bricks and Mortar Store. Now you can open a cheddar cheese store, because there will probably be enough prospective online customers interested in your product. Delivery is a major issue and tends to determine whether or not your product is feasible. Generally this means that online products are either digital or can be delivered economically "at a distance" without excessive cost or damage.

This is the "Conventional World View" — two different types of stores for two different types of products and two different types of markets.

But changes in online technology and behaviour patterns are bringing inevitable challenges to the Conventional World View. More and more business people are asking: "Can I use online techniques to market my products or services to a local market? Can I sell my dental services, pool cleaning, real estate services, landscaping products, discount tires, or even pizzas or Indian cuisine to local markets using online techniques?"

Who should care about this question?

Anyone who is in business should care about this question. Why? Because times and business conditions are changing. Changes are always both positive and negative. They are negative because they present challenges that many business people will not be able to meet. They are positive because they present opportunities for those of us able to "go with the flow".

The challenges are significant. As more and more people come to rely on the internet for information, the traditional media — print media in particular — will become less effective and more expensive. Printed local directories like the Yellow Pages will become less relevant because they will be out of date compared to online sources.

Competition has also made this field more fragmented. The monopoly that certain companies have had on the data that goes into local directories has generally been broken, so new players have entered the field. Fragmentation means that covering your market now requires buying more ads to reach fewer people. The gravy train that made the Yellow Pages so dominant has ended. Eventually the entire structure will collapse into a pile of second rate directories piled in the corner collecting dust.

The opportunities are equally significant. If it is true that the more and more people are moving online, then it is also true that it is just a matter of time before people use the web as a source for more and more local information. Think of movie listings, for instance. If you could find a handy, reliable, and easy-to-navigate online source for local movie listings would that not be preferable to searching through the local newspaper? Especially if you don't have a local newspaper?

So that means if your local business does not have a presence on the internet you will not be found by the increasing number of people using the web as a source of information.

On the positive side it means that those who DO have a presence will be able to capture an even more significant chunk of the online attention. Think about that for a minute. If you could make your Indian food restaurant or your landscape products consistently come up in the top one or two searches for "Indian food in Denver" or "topsoil in Calgary" wouldn't that have a major impact on your business?

Next: Part 2 — "I don't have a product that is marketable online."

This entire series of posts will be entered in the Linknet Marketing Library.

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