At the weekend I was in conversation with my sister-in-law about the experience of shopping online. Our conclusion seemed to be that in comparison to bricks and mortar (there's a phrase from the past), online shopping by its nature tends to be driven by price almost alone. Whilst I stood the corner for the value-added services that retailers like Amazon provide based on your purchase history, it seems that (in a very small sample) customer service is regarded as the high-touch, interpersonal, anything else is ultimately just cross-sell or upsell.
It's an interesting point – are there any online retailers who can distinguish their retail proposition without first cutting their prices to a bare minimum? There are certainly offline retailers who have extended their propositions online without dropping price points (Heals and Selfridges are two that spring to mind), but of pure-play web retailers I'm not so sure.
I seem to be using the word disintermediation quite a lot at the moment… Cutting out middle men. This is what seems to be at the heart of the impact that the Web is having on the world around us. In retail, whilst retailers are undoubtedly going to remain, there is a risk that they add less and less to the process. With little differentiation between them, the rise of monolithic retail giants like Tesco becomes ever more difficult to stop as massive economy of scale becomes the only strategy to cope with competition on price alone from tiny operators.
mmitII 