The Austerity Measurement: Don’t Blame The Internet, Blame The Business Model

The Austerity Measurement: Don’t Blame The Internet, Blame The Business Model

—by , October 6, 2010

In the last few weeks, business models appeared to shuffle away from the in-store experience and toward the Internet ever further—or the “cloud,” which is the fancy word of the day. Remember when you surfed the web? Search engines were called spiders? Or when you used Gopher?

Yeah right, no one used Gopher.

The news is from Apple, Barnes & Noble, Blockbuster and Google. Two brick and mortar media giants are under the gun, Blockbuster having filed for bankruptcy and Barnes & Noble having an internal power struggle in light of its weak capitalization of the digital market, and two technology giants fighting over unknown territory, with Apple TV’s launch and Google TV’s announced sales (half a million) for the year before the service exists.

Oh yeah, and Blackberry announced a flat piece of plastic that looks pretty and doesn’t actually work.

Okay, Barnes & Noble is books and main competitor is Amazon, and Blockbuster competes with Netflix and Redbox. But all of these businesses are fighting for your attention, above all. They seek to be your primary consumption delivery system. Some are ahead, some behind.

Before the epitaph is written for the brick-and-mortar experience, however, it’s worth noting that a recent study by the NPD group showed that 75 percent of Americans did not download (that is, buy) multimedia online within the last three months. 15 percent of the remainder downloaded media via computers, and the scraps were divided against video game consoles and cell phones.

Ignoring a margin of error, the conclusion is that three-quarters of the consumer market are finding their content elsewhere. Like stores.

But then why are stores failing?

Because they aren’t any good at selling things.

Traditional retail is dying not only because of increased overhead and all the other regularly referenced barriers to entry, it’s because they make the experience painful. Painfully painful.

Blockbuster is one of the few companies to have an online forum compiling how much people loathe the store’s shopping experience, appropriately named ihateblockbuster.com. And it’s pretty regularly updated. Sure, it’s a forum, which is in itself about as dated as the concept of having to drive to a video store to rent a movie, but if people are having an online bonding experience based on their dislike of your product in large numbers and maintain an internet presence for over ten years (based on the registration for the server), you may want to address some customer service issues.

The experience of going into a Barnes & Noble or a Blockbuster is one of gradual disinterest and disappointment. You walk in looking for one particular item. You search in the section in should be, the sections it might be in, the sections someone may have misfiled it in, and then finally you ask a sales clerk, if you’ve mustered up the courage to face the inevitable disappointment you’re about to receive. The clerk is clueless about the store’s inventory, so he or she punches the title into a slightly more powerful version of the search engine you can find on the store’s website, and sheepishly admits they don’t have it. If they’re on the job longer than a week, they’ll mention that they can order it.

Of course, you could always order it as well, but instead, you went to a store to buy it. But it’s not there.

What if every time you went somewhere you left with a feeling of “I’m an idiot for coming here?” Would you go back?

And don’t give me the “Did this guy really write an article since he couldn’t find something at the store?” Big box businesses are based around the idea that the product sells the product. Just throw it up on the shelves, let the people search through and find what they want, and they’ll walk up and buy it with their credit cards. The point is that they have to do better than that.

Salespeople should know the inventory and beyond. In cases where there isn’t enough sales staff (since you’re trying to cut cost), monitors should have the contents of each aisle searchable. Want to compete with the Internet? Then you have to use some of its tricks. So I was dumb enough to come to the store and they don’t have it? Make it easy for me to order it from the store to my house, so I don’t have to get back on the highway to come here.

Ever noticed that you always get harassed by a salesperson at the mall selling something you don’t want at all, yet you’re begging to be harassed at Home Depot when you’re looking for a rather basic item that’s impossible to find?

Guess what: the sales guy at Home Depot doesn’t know where it is either.

The Internet is not killing traditional businesses. Poorly run businesses are killing traditional businesses.

Meanwhile, the stakes online for Apple, Google, Blackberry and all the rest of them are a flurry of press, though what actually shakes out is anyone’s guess. They’re in the business of making products that no one has ever seen before, and that’s slightly different than building a retail model, but all of them are just new delivery systems to consume.

Believe it or not, sometimes we want to go to the store. But we don’t want to leave the store feeling like boobs.

    reader responses
  1. I definitely agree with this. There have been many companies who fell prey by their own inability to adapt to new working technologies and business models.

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    “I’m going to make him an offer he can’t refuse.” -Don Vito Corleone, Godfather (1972)
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    Eula McNinch on 10/6/2010 at 12:49 PM 

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