Lighting the Way: How to Compete with Internet-Only Lighting Stores
Nancy Meyer, HFN's senior editor for furniture and lighting, writes in this week's issue that brick and mortar lighting retailers should better compete with retailers that sell exclusively online. She proposes that brick and mortar retailers compete by offering better service–and hoping manufactures support MSRP policies. I would add to this that the physical retailer can join the online retailer by creating a website. Although setting up an online store can be expensive, as Meyer points out, "the Internet is here to stay." Online sales will grow 20% this year, and they are already 4% of the economy. Secondly, I would suggest that physical stores offer to match the price offered by major online channels. For example, a small lighting store may match a lighting fixture price from an Internet-only retailer. The shopper would likely pick the local store since one can inspect the lighting piece on site and have a real person involved in the exchange. (Some writing has been done on this in economics, and it's called the Crazy Eddie effect: don't lower prices, just offer to match them when they arise. In this manner, not every purchase is a margin losing sale.)