21 November 2011

Readers who have been in the industry more than 10 years (which I suspect means most of you) will remember the ‘clicks & mortar’ debate that followed the advent of internet car sales. Showrooms were going to be as redundant as the dinosaurs and everybody was going to buy cars online.

So, how ironic that at least two of the world’s most successful internet sales operations are now opening physical shops.

You’ll probably have read about eBay’s venture into the high street with the opening of a so-called ‘pop-up’ in London for five days just before Christmas. But probably more significant is Chain Reaction’s 10,000 square foot bricks-and-mortar shop which has just opened on Boucher Road in Belfast.

Unless you’re a cyclist, you may not have heard of Chain Reaction but they are the one of the Europe’s biggest online retailers of cycle accessories – in fact not just accessories, but fully built-up bikes costing up to £6000 a throw!

Now you could argue that you’d be mad to buy a £6000 bicycle without trying it for size first and I’d be bound to agree. But some people must do, otherwise Chain Reaction wouldn’t stock them.

Internet retailers moving to physical sites may seem odd in a context where more and more of us are buying remotely. The latest Cars Online survey suggests 29% of UK motorists are now prepared to completely purchase a vehicle online, a figure that has risen from just 19% two years ago.

Of course, the rub is that those customers who are willing to buy online are looking for a bigger discount as a result. And that’s where the two cultures clash.

Chain Reaction has been instrumental in driving down prices (and margins) for traditional cycle stores but even they recognise they are likely to sell more higher value bikes, at higher margin, if the customers can touch and feel the product.

Rupert Saunders

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Tags: Auto Retail Network, internet sales