Retailers are frightened of the internet

Do you go down every aisle in the supermarket? If so you are more likely to gain web success.

Do you go down every aisle in the supermarket? If so you are more likely to gain web success.

Supermarket shoppers fall into two distinct types – which one are you? One kind of shopper goes up and down every aisle, making sure they see everything so they don’t forget anything for their weekly shop. Others dart around the store with specific purchases in mind, ignoring those aisles that don’t contain things they don’t want. Some people are worried they might “miss something” so they are the ones who go up and down all the aisles. Others don’t care if they miss things, they just want to get what they need and hop off home.

There is a potential personality link between these two types. The “aisle walkers” are likely to be opportunists, people who are happy to “have a go”, who like finding out new things. The “aisle hoppers” are those who are motivated by goals, who set targets and are driven by specific achievements. And we see the same distinction online in the personalities of businesses.

Ocado, for instance, are the “aisle walkers” of the supermarket industry online. They are happy to “have a go” at new things, try out new business ideas and to see what happens if they try something. Unlike other supermarkets for instance, they opted for a central warehouse approach, instead of a local “pick and pack” operation.

But Morrisons, on the other hand, is more like an “aisle hopper”. They are not seemingly interested in “having a go” or “seeing what happens”. They are careful, planned and driven by specifics, it seems. That’s because when they announced their latest results they still had no real announcement to make about an online operation. Ocado started over ten years ago and has been happily delivering to Internet shoppers since 2002. Tesco and Sainsbury too have had online retail operations for ages. Indeed, Tesco took its first online order back in 1984 – BEFORE the invention of the Web itself. Last year it sold more than £2.1bn of goods online. Meanwhile, Morrisons appears to be twiddling its thumbs.

What are they waiting for? Argos announced results recently, showing that although people were buying less (sales were down by 8%), Internet sales had gone up from 28% of turnover to 32% of turnover; for Argos that’s about £1bn of sales a year online.

So, here we are with major retailers making significant profits online, with many of them pioneering this sector – having a go and seeing what happens. Meanwhile, on the sidelines sits Morrisons, waiting, watching – and thereby potentially missing out on sales. But they are not alone.

Most retailers do not have online operations. Strange as it may seem, most shops do not sell stuff online. They, like Morrisons, appear to be rather like the supermarket “aisle hoppers” only going for specific things, rather than being open to new ideas, to change and to “having a go”. So why are they like that?

A clue came yesterday on LinkedIn where a question was raised about the “fears” of social networking. It seems that some businesses are “frightened” of the consequences of taking part in social networks. But that same kind of fear persists in other areas of the Internet. Many businesses fear that things will go wrong, they get concerned that it will affect other parts of their business and they get frightened of the “unknown”. They would much rather go after what they know they want and ignore all this “Internet stuff”. It is a distraction to them – borne out of fears.

The problem is, that those fears are usually unrealistic. As Tesco, Ocado and Argos have shown there is a lot to be gained by “having a go”. Sitting on the sidelines and then whining years later that “if only” is no way to make your mark or to make more profits. Far too many retailers are going to be whining on the sidelines in the future. As the Argos data shows us, more and more people who are prepared to spend money are preferring to spend it online. If you don’t have retail operations to meet that demand someone else will.

It’s time for retailers to start walking down the aisles of the Internet and seeing those wonderful opportunities they hadn’t realised existed.

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