E-tailers resort to bricks and mortar

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by Oliver Goggi

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The dotcom world is going back to basics as the high street proves more profitable than the virtual world.

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Following a dismal fourth quarter of 2000 in which dotcom closures averaged one company a day, signs are that the pace of closures isn't slowing for 2001.

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Already in the last few days big e-tailing names such as etoys and letsbuyit.com have thrown in the towel, which further begs the question whether these retailers can survive with just an online presence.

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The high street is definitely back in fashion in America where Internet retailers such as e-trade and Expedia.com have been opening ventures in the real world.

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While this time last year they were boasting about destroying traditional shops, e-tailers have had to wise-up quick, many of them opening branches on the high street, launching magazines and various other non-techie things.

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Like most US trends, this has started to spread to the UK with an increasing number of our boys extending their business with a physical presence.

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One example of a UK company getting to grips with this hybrid business model is ThinkNatural, a health and beauty e-tailer part owned by retail giant Kingfisher. Despite it already having a mail order business, ThinkNatural is set to take to the high street next month when it starts selling branded products in Superdrug stores and various independent shops.

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Similarly Gameplay, which traditionally sold computer games online has just done a deal with Dixons to open up eight high street shops, each having net access. Not only should these stores create a few more sales but also ensure a permanent marketing presence on the high street.

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Current figures put Internet sales as representing less than one per cent of total retail sales, an alarming low number, especially considering the expected Christmas boost. This number is going to have to grow significantly before e-tailers are able to seriously compete with the high street.

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Where they've all faltered is that they are not appealing to a sufficiently wide audience. While it might seem convenient to go online and shop from the comfort of your armchair it still doesn't appeal to the vast majority of the public.

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So what's so off putting about shopping online Are the services are too slow or too complicated Is delivery too unreliable Or is it just that the whole shopping experience is not sufficiently fulfilling

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