I had an interesting day today, as Hamish Dunn the MD of Mountain Equipment paid us a visit. Being big fans of the gear, we’d pursued ME to become a Webtogs supplier, so were chuffed to get the account and a visit from the big cheese to boot.

What’s this got to do with starting an e-commerce company, I hear you say… Well, lots of brands are less than impressed with the Internet and how their products are displayed and sold. Many see the opportunity, but have been let down by silly price cuts, poor product images and lousy customer service. This is especially true for the outdoor industry, with many brands refusing to supply web only retailers point blank.

My meeting with Hamish was hugely interesting, as it gave me an insight into how the major brands in our sector view the Internet. From his point of view, I think he was simply there to check we weren’t a ‘bunch of Muppets’.

The common thread to this seems to surround price. The temptation with a web only business is to leverage the cost savings as compared to bricks and mortar retail, and pass these on to the customer, in an attempt to make a smaller margin but on far higher volume. This strategy works in some markets, especially consumable goods, media items (dvd, cd, etc) and consumer electronics.

In a market like outdoor, this is far harder to pull off. For one thing, the mass market volume simply isn’t there. For another, most products tend to be high priced items that feature cutting edge technical features. The quality of service the consumer receives at the point of sale is also far more relevant, as products tend to be designed for a specific use, have to fit correctly, etc.

I don’t think it’s practical to offer top notch service and specialist advice, whilst selling core, in season, product lines on a 10% margin. I also think that companies such as Zappos, Amazon, etc have built tremendous brand loyalty and have done it based on number of factors, not just price. I recently bought a CD from Amazon and paid £13.49. Without a doubt, I could have found a better deal elsewhere, but I know Amazon, I know I will get the CD.

Translate this to a more specialist market, where other service factors come into play, and the brand of the retailer becomes even more important.

So Webtogs will always be competitive on price, and offer great value. But will we be the cheapest on every product? Not if it means a cut in the service levels we offer our customers, that’s for sure.

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