How can Brick & Mortar shops compete with Online Shopping?

Andy From Sligo

sligojoek wrote: »

I ordered some stuff today on amazon. All told it's costing me 35e delivered . If I was to drive around a small town it would cost me 50e plus petrol. Do the maths.

if you said this to a local trader and he said (on the verge of crying his eyes out) "well for that 50eur I have to pay my rent, pay my staff, pay my heating and lighting pay my rates, pay my taxes, pay for advertising and other associated costs and pay for the actual item out of all that ... would you be sympathetic to him?

Andy From Sligo

the issue of where the VAT goes ... well if you order online from UK for example I think the UK standard rate VAT on goods is 20% and that money goes to the UK government .... the Irish Vat rate is 23%

It would be controversial and unpopular , and I know I wouldnt like to pay a difference , but should we pay a difference if we order from the UK (3%) difference that gets transferred to the Irish government - or even when online ordering pay the net price without the VAT rate at all added on and pay the full 23% to the government ? - they most probably have thought about this loss (where they are loosing out) already when someone buys from a uk online retailer

prinzeugen

L.Jenkins wrote: »

For the likes of Aldi, Lidl, Supervalu, Tesco and Dunnes to become more competitive, I know they offer the ability to shop online in some cases (Tesco delivers your online shop), each retailer could invest more in the ability to shop online and deliver. Would be handy for those living in the arsehole of nowhere or people who simply can't get away from the house for whatever reason.

Shops and Retailers need to begin investing more in online activities.

Unless they were delivering to multiple addresses in a rural location it is not viable.

Why spend an hour delivering €50 of shopping to the back of beyond when the could spend an hour delivering €500 worth of shopping to more built up areas.

It was the same when I was a motorbike courier. We all hated going into the North East of Dublin. It would take ages to pick-up/deliver 2-3 items whereas you could do 10-15 pick-ups and drop offs anywhere else in the city in the same amount of time and earn more money.

Andy From Sligo

L.Jenkins wrote: »

For the likes of Aldi, Lidl, Supervalu, Tesco and Dunnes to become more competitive, I know they offer the ability to shop online in some cases (Tesco delivers your online shop), each retailer could invest more in the ability to shop online and deliver. Would be handy for those living in the arsehole of nowhere or people who simply can't get away from the house for whatever reason.

Shops and Retailers need to begin investing more in online activities.

agree - they also need something to fall back on . if shop is quiet you have online shopping to keep you going.. and if the online shopping is quiet people can always come physically into your shop to pick up the item .. ideal for "people who just dont do online shopping" (sorry to generalize but that will normally be old people and technophobe people)

road_high

Twenty Grand wrote: »

Why are shops open when most people are working?

I could never figure that out. I've worked in many places and bar the lunchtime rush, you don't see the same type of shopper on the weekdays that you see at the weekend.

Even if shops opened 11 to 7, at least people would have a chance to pick something up after work, instead of thinking "oh its Monday, I'll have to wait till Thursday to buy that thing when the shop is open late, but if I buy online I'll have it by Wednesday... "

There's a place nearby that sells coal cheap. They're open 9-5 Monday to Friday.

I'd love to but coal from them, but I'd have to take time off work to pick it up

So true. There’s a few traditional shops I really like but they only open office hours so rarely make it in to them. Makes no sense that the majority of shop opening hours coincide almost exactly with the majority of workers hours. It’s little wonder busy people go online to get what they want whenever they want it.
I prefer bricks and mortar shops too personally. Can try on things and get a feel for a product

Capt'n Midnight

L.Jenkins wrote: »

For the likes of Aldi, Lidl, Supervalu, Tesco and Dunnes to become more competitive, I know they offer the ability to shop online in some cases (Tesco delivers your online shop), each retailer could invest more in the ability to shop online and deliver. Would be handy for those living in the arsehole of nowhere or people who simply can't get away from the house for whatever reason.

Shops and Retailers need to begin investing more in online activities.

Aldi / Lidl do online stuff in the UK.

I've bought two TV's off Tesco online.

Because Tesco UK online were selling the same model for €100 less than Tesco Ireland.
Parcel Wizard are great. TV delivered from NI to work for less than AnPost charge for a 250g packet.

Andy From Sligo

when i moved to Ireland 27 years ago (rural ireland) small little local shops didnt think nothing of having someone knock on the shop owners front door at 11pm for a tin of paint and a pint of milk and a loaf of bread - and the shop owner obliged ... should'nt think that happens these days ... or it might who knows?

Irish Guitarist

I can't say I find many bargains online but if I did I'd buy them. I'm not going to waste money in shops if I don't have to out of some moral obligation.

There used to be a record shop here that had no idea how to store CDs. I gave up buying from them because every second CD I bought was so covered in dust it had gotten scratched. Scratched CDs aren't that common an occurrence but these people were experts at destroying them.

There was a clothes shop here that I bought a pair of jeans from years ago. When I was paying at the counter the girl knocked a cup of coffee all over me. She just tutted at the last girl leaving coffee there. It didn't even dawn on her to say sorry to me. I had to walk home with coffee all over my jeans (the ones I was wearing).

Both these shops have closed down and I don't feel an ounce of sympathy for them. I don't owe shops anything.

cbyrd

Lots of smaller shops now do online services too. For someone like me who finds it difficult to physically get to a shop, online shopping is far easier. Instead of having to get a nurse in to take care of one of my children, walking around town for 2 hours trying to source a certain product, on to Amazon, type it in and a day or 2 later there it is.
It's a no brainer. Plus it so much cheaper.

ednwireland

Hmm interesting , most of my clothes I buy online in sales, order on discount picked up three decent shirts from debenhams less than 20 euro each.
Shoes clarks.co.uk over 50 % off on every pair.
Bought a Donegal tweed jacket on sale locally. But guys know me got a good price.
Chainsaw bought locally but again their prices are competitive and they sell on line.
Petrol multi tool from an online crowd in UK at a price I wanted to pay.
Biodegradable chainsaw oil local shops refuse to stock it I've asked. so bought online

I tend to work late so I don't want to spend my spare time shopping.

nice_guy80

maybe if the government reduced the cost of operating a business?

rates, insurance, electricity

Mountainsandh

A lot of retail in industrial zones of towns in France seem to be doing just fine.

I think the town centre retail has gone too fancy. I'm not looking for fancy. I don't want music and an experience for a higher price.
I'm looking for a specific thing that I've seen online, my choice is pretty narrowed down before I step inside the shop. I'm willing to pay a little more for getting it immediately, not a lot more.

I need the shop to have a reasonable selection of items that fit my specs (cheap/middle/high quality range) in stock, and for a reasonable price.

Get rid of the fancy shelving, lighting, props, high rent, window displays, and this outdated notion that a sales assistant will sway me into buying something or buying more.

A simple premises comfortable enough to browse in (lit enough, warm enough, space enough), plenty of choice of items and I can touch and see with my own eyes, a sales person that is trained enough that when I give my specs they pull out said selection quickly and efficiently, and possibly can give advice if I need it.
Easy, free, and close parking and access.

That's all I need.

Town centres may retain a few boutiques for souvenirs, books, gift items that benefit from a nice display, other than that restaurants and cafes.

Let all the rest be in the outskirts and more to the point, that'll make it worth my while driving 25 minutes out to purchase something I can feel and touch immediately rather than shop online.

edit : also, the stock is important.
In the 2 small towns that are near me, things are not in stock "but we can get it in for you next week". I just spent a fiver driving down, parking, and valuable time. I ain't doing it all over again next week for the privilege of paying more. If you're selling something that doesn't go out of date, have stock.

The J Stands for Jay

Andy From Sligo wrote: »

i know, .. but then you will have us mere mortal shopper being blamed for empty units, boarded up shops because we want to buy stuff like a chuck key for a fraction of the price ... "but you should be paying the 9.50 what your local shop is charging ,we are always being told, because you are keeping that shop open and people in jobs and helping the local economy ... whereby if you pay the fraction of the prices your hard earned money is most probably even going out of the country, let alone not supporting local shops and keeping them open ... thats a terrible thing to do!"

The products are pretty much all manufactured abroad. Why should €8.50 of the Chuck key price go to a lad who has given you nothing other than fast delivery? Actually, I wonder what next day delivery on the Chuck key online would have cost?

The J Stands for Jay

Andy From Sligo wrote: »

if you said this to a local trader and he said (on the verge of crying his eyes out) "well for that 50eur I have to pay my rent, pay my staff, pay my heating and lighting pay my rates, pay my taxes, pay for advertising and other associated costs and pay for the actual item out of all that ... would you be sympathetic to him?

So, should I be worse off through no fault of my own, or should the business owner be worse off due to their inability to manage costs?

The J Stands for Jay

Andy From Sligo wrote: »

the issue of where the VAT goes ... well if you order online from UK for example I think the UK standard rate VAT on goods is 20% and that money goes to the UK government .... the Irish Vat rate is 23%

It would be controversial and unpopular , and I know I wouldnt like to pay a difference , but should we pay a difference if we order from the UK (3%) difference that gets transferred to the Irish government - or even when online ordering pay the net price without the VAT rate at all added on and pay the full 23% to the government ? - they most probably have thought about this loss (where they are loosing out) already when someone buys from a uk online retailer

Websites on the EU are already supposed to add the vat rate of whatever country they deliver to. You'll notice the price changes on Amazon when you change between your real address and your parcel motel address.

sligojoek

Andy From Sligo wrote: »

if you said this to a local trader and he said (on the verge of crying his eyes out) "well for that 50eur I have to pay my rent, pay my staff, pay my heating and lighting pay my rates, pay my taxes, pay for advertising and other associated costs and pay for the actual item out of all that ... would you be sympathetic to him?

I'd rather 15 quid in my pocket than someone elses. Full stop.

Mountainsandh

Andy From Sligo wrote: »

if you said this to a local trader and he said (on the verge of crying his eyes out) "well for that 50eur I have to pay my rent, pay my staff, pay my heating and lighting pay my rates, pay my taxes, pay for advertising and other associated costs and pay for the actual item out of all that ... would you be sympathetic to him?

I wouldn't. This is business. If your business model is not viable anymore you change it, you don't cry for charity.

Move to the outskirts. Have decent, orderly shop, without the frills. Hire 2 staff instead of 4, and have them pack and process online orders when the shop floor is quiet, or/and have them train themselves in the products they sell so when a bricks and mortar customer turns up, they're impressed by their advice and service.
People do their research online before they buy, how is it that it seems still acceptable to have sales staff who know less than a potential customer about what they sell ?
Happens alllll the time !

enricoh

I think any business with a turnover of less than say 100k shouldn't have to pay rates.
I was in Roscommon and Leitrim for a few days recently and some of the towns we're ghost towns. The council should be giving the shop owners a grant instead of taking rates.
On the outskirts of one of the towns here was a heap of exercise equipment installed at huge expense no doubt in a park where two alcos were the only ones using it as a bench! Great use of the rates!

Pod123

Sometimes it’s hard to beat on line shopping if both are out at work.

Priced a ladder in the local hard ware store and then priced same on line. Bought on line cheaper and delivered to door for less. Local hardware store was dearer and I would have to collect.

I think it was better when the big retail outlets were closed on Sunday it gave the smaller shops a chance and people still survived.

Perhaps it’s the way forward and the youth like it know the wife and daughter do.

.......

I just wouldnt know where to go for a lot of the things I buy online.

Recently a girl in work recommended a particular brand of make up to me for a specific item and said she'd bought it in the airport so didnt know who would be stockists locally. I did try Boots and a local chemist but they all looked at me blankly, so I ordered it online (from an Irish pharmacy who is smart enough to sell online) and had it the next day. I certainly wasnt going to drive around every local pharmacy for miles in the hopes of finding it.

Same goes for a lot of books and jewellery. I have no patience for browsing in loads of shops on my feet when I can idly google for things I want.

For me price does have something to do with it but its more about instant availability of an item that i would not know where to find otherwise.

L.Jenkins

....... wrote: »

I just wouldnt know where to go for a lot of the things I buy online.

Recently a girl in work recommended a particular brand of make up to me for a specific item and said she'd bought it in the airport so didnt know who would be stockists locally. I did try Boots and a local chemist but they all looked at me blankly, so I ordered it online (from an Irish pharmacy who is smart enough to sell online) and had it the next day. I certainly wasnt going to drive around every local pharmacy for miles in the hopes of finding it.

Same goes for a lot of books and jewellery. I have no patience for browsing in loads of shops on my feet when I can idly google for things I want.

For me price does have something to do with it but its more about instant availability of an item that i would not know where to find otherwise.

This is what the internet and online shopping is doing to the retailer in Ireland. I'm of two minds about it. I'd love to see our local retailers supported, while supporting local jobs. However, there's many a business that could have both a physical and online presence. Some retailers might even be suited to an online presence only.

No one nowadays wants to spend hours trawling through shops and driving around town to find 1 or 2 items. As another poster mentioned, too lazy to quote the post, shopping online with Tesco, Centra, Supervalu etc. is great, but not worth their while to offer deliveries to remote rural areas unless there are a large number of orders/deliveries in the area, or if it is just as easy to pick up the online grocery shopping order at a later time. I.e. a family or single parent who hasn't the time or patience to be carting young children around a shop.

I suppose online retailers are the way to go. A previous company I worked for suffered greatly and went into receivership and had to close all stores. They now over sales online only, so not computer repairs or servicing is offered any more.

The current company I work for sells online through a number of channels and our own site. We don't have a warehouse for stock and delivering products to customers are dealt with by shipping directly from the supplier to the customer or through an intermediary warehouse/courier set up.

wyf437gn6btzue

I`ll put the whole brick & mortar vs online into my perspective....

I have a business that`s totally online and I work from home, my average order total comes to about €100 per order. I can get customers through adwords with fairly decent conversion rates and each order is mostly hassle free to deal with. In the 9 months I`m running this particular business I have had one person from the local area ring to ask can they visit and order in person (they didn't even turn up).

I was recently looking at offices/units in the town I live. For rent, rates, bills etc you`d be looking at least €2k p/m for a smaller, more out of the town office. So for that to make sense I`d have to have at least 20-25 orders per month from people in the locality to justify having a physical location (which Is unlikely). Then to deal with the extra orders I`d probably need an extra staff so I`d need even more additional orders to justify that. Then you have the liability that`s involved with having customers visiting, the list goes on.

So for me (and probably a lot of other people with similar businesses like mine) it makes no sense whatsoever to have a physical location for a business that does a good turnover online.

Anyway, that`s my perspective on the whole brick/mortar vs online argument and why a lot of shop units lay unused in towns across Ireland.

Geuze

Andy From Sligo wrote: »

the issue of where the VAT goes ... well if you order online from UK for example I think the UK standard rate VAT on goods is 20% and that money goes to the UK government .... the Irish Vat rate is 23%

It would be controversial and unpopular , and I know I wouldnt like to pay a difference , but should we pay a difference if we order from the UK (3%) difference that gets transferred to the Irish government - or even when online ordering pay the net price without the VAT rate at all added on and pay the full 23% to the government ? - they most probably have thought about this loss (where they are loosing out) already when someone buys from a uk online retailer

With Amazon, you do pay Irish 23% VAT, even if goods delivered from UK warehouse.

Geuze

Andy From Sligo wrote: »

if you said this to a local trader and he said (on the verge of crying his eyes out) "well for that 50eur I have to pay my rent, pay my staff, pay my heating and lighting pay my rates, pay my taxes, pay for advertising and other associated costs and pay for the actual item out of all that ... would you be sympathetic to him?

Note that many Irish businesses have massive gross profit margins, so I have little sympathy for them.

A pub-restaurant in Sligo has a 74% gross margin, leaving plenty for a generous net margin.

Another restaurant charges 17.25 for pizzas, massive margins there.

Some pubs manage up to 68% gross margin on drinks.

Ace2007

enricoh wrote: »

I think any business with a turnover of less than say 100k shouldn't have to pay rates.
I was in Roscommon and Leitrim for a few days recently and some of the towns we're ghost towns. The council should be giving the shop owners a grant instead of taking rates.
On the outskirts of one of the towns here was a heap of exercise equipment installed at huge expense no doubt in a park where two alcos were the only ones using it as a bench! Great use of the rates!

The shop owners could just get a loan off the credit unions if they really wanted to make their business models work.

Just being curious what shops are you talking about that can't build on online version of their business as well as on the ground?

Geuze

Enzo Brave Macrame wrote: »

I was recently looking at offices/units in the town I live. For rent, rates, bills etc you`d be looking at least €2k p/m for a smaller, more out of the town office. So for that to make sense I`d have to have at least 20-25 orders per month from people in the locality to justify having a physical location (which Is unlikely). Then to deal with the extra orders I`d probably need an extra staff so I`d need even more additional orders to justify that. Then you have the liability that`s involved with having customers visiting, the list goes on.

Yes, comm rents are way too high.

mickdw

Local shops need to stop being lazy. They need to offer broader range at better prices with better customer service. If this means tying up with larger brands and working with those brands online sales for small margin, so be it.
local hardwares tying up with expert electrical is one example. At least they then offer somewhat competitive or at least transparent pricing, have up to date product and access to a large range at short notice. The benefit over buying outright online is the ability to see the product before purchase, easy returns process etc.
I've little experience in actually using them and I don't know how good or bad their pricing is but the idea is good relative to a local store trying to maintain a range of electrical goods.

Alf Veedersane

prinzeugen wrote: »

Most of these small cafes/coffee shops/restaurants are started by people that no nothing about what they are doing.

They're the ones that give Andy From Sligo his free coffee refills for no reason

CeilingFly

What the OP and many others are forgetting is that people LIKE shopping.

Normal stores will never go away because they can offer an experience an online store can never offer.

If you exclude anything travel related, online shopping represents about 7-8% of the retail market. In the UK which is the world leader in online shopping (yep bigger than USA) it is about 12%.

It is estimated that the UK will rise to 16-18% in the next few years and Ireland will be at about 12%.


In the eighties, catalogue shopping accounted for close to 8% of retail sales in the UK, so whilst online is higher, its not the game changer people think it is.

Retail does need to change, but that's a natural evolution. Have a look at Lifestyle Sports in Cork (their new store), that simply cannot be replicated online.

So whilst radio did not kill newspapers and TV did not kill radio, online will not kill retail stores.

Many will need to adapt, but they will.

CeilingFly

Geuze wrote: »

Note that many Irish businesses have massive gross profit margins, so I have little sympathy for them.

A pub-restaurant in Sligo has a 74% gross margin, leaving plenty for a generous net margin.

Another restaurant charges 17.25 for pizzas, massive margins there.

Some pubs manage up to 68% gross margin on drinks.

That shows very little understanding of business.

Food and drink business HAS to have margins of 60-75%, otherwise they'll fail.

Remember gross margin is before ANY costs are deducted except raw materials, so for a restaurant add gas/electricity, staff for prep, staff for cooking, staff for serving, staff for cleaning. Breakages, wastage, rent, rates, heat, advertising, depreciation, interest on borrowings and much more.


Try opening a restaurant and operate on a gross margin of under 60% - the busier you are the bigger the loss you will make.