E-commerce is a subject that is being talked about at every convention I attend. Everyone wonders how e-commerce will influence bricks-and-mortar retailing. I see retailers and developers embracing the Internet rather than fighting the inevitable. Real estate professionals believe e-commerce won't replace bricks-and-mortar retailing because it can't duplicate the physical experience. But, there is no doubt the Internet will have a place in the retail world. Standard & Poor's Structured Finance Special Report says, "Judging by the number of large and small retailers that are in the process of establishing major Web-based shopping sites, the question of whether the Internet is going to have a major impact on retailing has already been answered in the affirmative."
Also, if a report by Jupiter Communications is any barometer, retailers and developers better take note. The report estimates more than 60% of households will be online by 2003 and Internet shopping may reduce retail space demand 25% over the next three years. If so, retailers without sites will be left in the dust.
Yet, recently, San Francisco-based Levi Strauss made a decision to close its www.levi.com and www.dockers.com Websites after Christmas. Bowing to the concerns of its retail outlets, Levi Strauss has decided to sell these products on JCPenney and Macy's Websites. Levi's' move to e-commerce had upset these key retail partners who were prohibited from selling Levi's and Dockers from their own Websites. After Levi Strass launched these sites, sales did not meet expectations and costs have been prohibitive.
Lisa Allen, analyst at Cambridge, Mass.-based Forrester Research Inc., says in the San Francisco Gate that Levi Strauss is "setting a trend in the wrong direction by giving in to retailers and backing away from the Web."
Is Levi Strauss just the first of many casualties of e-commerce due to pressure from bricks-and-mortar retailers? How will other retailers tackle this type of situation in the future? Time will tell where e-commerce will fit into the picture. Until then, the relationship between bricks-and-mortar and clicks-and-mortal will be precarious at best.