E-Commerce Teams With Bricks & Mortar

Peter G. Miller
OurBroker®

If you've read the hottest online news for the past week or so, you have no doubt noticed a curious trend: Big players online are joining up with old-fashioned retail outlets. Why this is happening, and why this is happening now, tells us much about the real state of online economics.

In the past few days it's been announced that Wal-Mart and AOL will create a co-branded ISP. Best Buy will promote MSN while K-Mart will work with Yahoo! As well, Radio Shack has an alliance with Microsoft and Circuit City has formed an association with AOL.

What's it all about?

There are really two forces at work. On one side, if you're a retailer you need an online presence. If you're a big retailer with a branded identification, you can readily develop a site -- but you may not maximize traffic unless you have an alliance with a major Internet Service Provider.

Alternatively, if you're an ISP, the pool of easy memberships has run dry. To grow from this point forward you'll need big wads of cash for marketing -- a need which comes just as Juno, Bluelight.com, NetZero, and others are offering free online access.

Leading ISPs must buddy-up with major retailers because the big store chains have thousands of local outlets which are visited by tens of millions of people each week. In the same way that online sites have discovered they need traditional media to stand out, they also need brick-and-mortar retailers and the foot traffic that only real stores can generate.

While bricks-and-mortar retail outlets seem likely to remain with us, change in the ISP market seems likely. Why pay several hundred dollars a year to be online if the same service is available without cost? And if you're an ISP that gets the bulk of your income from membership dues, how do you compete with people who are giving away the very service that you sell?

No doubt established ISPs will talk about the additional features they offer, but how strong is such an argument when the unlimited resources of the Internet are just a click away? Alternatively, no one is planning a free retail outlet to compete with Sears or Wal-Mart -- organizations that generate huge incomes.

In the next year or so we'll have an opportunity to see how -- if at all -- free ISP services impact the marketplace, and we'll also see how various retail/online alliances work out. The free ISP movement has already changed the online service industry in the UK, and the same result is possible here. In addition, some of the deals which combine cheap computers with three-year ISP membership requirements are going to look awfully costly if free online access becomes commonplace.

In the next year or so we'll also have a chance to see something else: Technologists have long suggested that with the emergence of the Internet we could do away with most brokers and instead serve buyers and sellers electronically. It hasn't happened yet, and while the Web will surely speed paperwork and allow brokers to become more productive, it's become increasingly plain that the Internet will not be a substitute for either neighborhood licensees or the stores where they shop.

The Common-Sense Mortgage

The latest edition of The Common-Sense Mortgage -- in its second printing since September -- is now available in bookstores online and off. In print for nearly 15 years and widely recognized as the standard consumer guide to real estate financing, it's described by syndicated columnist Robert Bruss as "an encyclopedic, detailed summary of just about everything real-estate investors, agents, lenders and borrowers want and need to know about mortgages."

"On my scale of one to 10," says Bruss, "this superb book rates a 10."

"This continues to be the most, lucid, comprehensive treatment of the subject on the market," says The Real Estate Professional. "If you want solid, reliable information about residential real estate financing, written in a thoughtful, convincing style, this is your source."

For additional information, press here.

Question Of The Week

Q: We want to work at home, but local zoning prohibts such businesses. How do we fight city hall?

A: You need to use some caution here. Rules on the books can be enforced, a problem should a neighbor complain.

That said, what exactly do the rules say? Is it a home office that's banned -- or is it something else, say unlicensed home improvements, on-street parking, signage, deliveries, chemical storage, etc.

For details, speak with a local real estate attorney. It may be that compliance is possible, and it may also be possible to get a variance.

Weekly Resource

The Apple MacIntosh is still with us, and it represents some of the best available technology. To follow news and events related to the Mac, try MacCentral.com, a meta site for all things MacIntosh.

Published: December 28, 1999

Use of this article without permission is a violation of federal copyright laws.

Editor's Note: This article reflects the opinions of Peter G. Miller only and not necessarily the views of this or any other publication, organization or Website owner.