Why should brick and mortar companies move online?

They don’t have much of an option but to move online. However, as of now, B2B is the primary goal. B2B linkages can iron out and improve the efficiency and effectiveness of the business quickly and specially in areas of procurement, supply chains and other activities related to suppliers and distributors. This is an unbelievable win-win situation as the net is cutting down support cost and improving customer satisfaction. Companies are spending less money and the customers are happy as they have online status of their order.

What are the risks involved in the transition of a brick and mortar to the web?

First is the basic issue of competition. They may not be as fast on their feet as many of the nimble dotcom players. The smaller dotcom players are not yet burdened by cost structures and hierarchy as in legacy companies. A bigger problem is they are finding it hard to retain the talent they need because they are not able to offer attractive reward systems. Finally and importantly, they also have an established relationship with distributors, retailers and others partners in the sales channel. Upsetting this apple cart may result in upsetting them, facing legal court cases or product boycotts.

What are the advantages of a brick and mortar over its online counterpart?

These companies bring in some basic advantages to their online strategy, like brand loyalty, brand equity and knowledge of the product. The biggest advantage is that companies can use its channel to increase its marketshare by leveraging on its existing physical points of presence. Brick and mortar players wanting to have a virtual presence have two of the biggest issues with online selling to its advantage—immediacy and return. Immediacy means that you can buy something from the net without waiting for 3-4 days to see the product. And if you have any problem with the product you can return it without trying to figure out how to ship it back. From the customer perspective, security, privacy or other issues are not the problem but immediacy and return are.

Are you of the view that the net is going to lead to localization rather than globalization?

The first wave of the internet has had the American look and feel. They have been English sites and more tuned to the American culture in terms of news and content displayed on the sites. Now as we move these business models globally, they have to be more attuned to local market situations, traditions, cultural issues, language issues and local delivery issues, and fit into the local environment better with local content partners. So what may happen in the near future is you might have a global business but with varieties of versions depending on locations. The same concept of think local, act global.