02/11/2005

RESEARCH

Online retailing strategies by Mckinsey

Mckinsey - the renowned strategy consultants - have analysed the four different online retailing models and offer some valuable insights. Direct retailers with physical stores captured 52% of Internet sales in 2003, while those without stores garnered just 31%.

Retailers without stores do well as either "efficiency machines" - e.g. Amazon - (25% of total online sales) or "niche leaders" - e.g. LL Bean - (6% of total online sales). Store-based retailers do well as either "traffic drivers" - e.g. Walmart - (35% of total online revenues) or "triple plays" - e.g. Williams-Sonoma(17% of total online sales) depending on their scale and profit margins.

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