It's one of the common questions I get as a consultant and speaker, "Which of our products should we put on the Web?ä My answer is my all-purpose answer for anything Web related: "It depends.%
It depends on a variety of strategic factors. What's going to work best for your customers? What helps you encourage the kinds of behaviors that you want?
Even with the "it dependsä answer, there are several models that you can look at on how to do it. Which one you choose depends on your database capability, the overall state of your data, and how easy it is to use, as well as the needs of your customers and your supply chain partners. There are three basic models for how to do this.
The first one is to put less inventory on your Web site than you offer in other places. Lots of small retail stores do this, and make it work quite well. They may offer fifteen or twenty thousand line items through their store and catalog, but theyâll probably only put somewhere around two thousand of those on the Web site. How do you decide which ones?
You pick the ones that are most likely to bring you profit. I usually suggest to my clients that there are two ways to identify those.
Products are likely to bring you more profit if they are among your most profitable and good-selling products. Put them on the Web, and you're likely to sell more on the Web. Be careful, though, because very often those highly popular products are the ones that bring people into the store again and again and again, and your average order size might be larger if you sell them in the physical store.
Another way to identify those great products to put up first is to pick replenishment products or products that work better on the Net. Let's look at our musical retailer example.
A retail musical instrument store is likely to sell guitars. It's not likely to sell guitars over the Net, though, because the folks who play guitars want to handle a guitar. They want to see what it feels like. They want to hear the particular sound.
That's not true for most of their supporting supplies. That's not true for strings or frets or picks. It's not true for music. Those items make great Web order items because they are items that can be good convenience purchases.
The second option with inventory is to put the same line items on the Web site as you have in the store. For many businesses, that's hard to do right out of the box. In the companies that I've worked with, I've found that the quality of the inventory databases is pretty poor. That means that, as a practical matter, many companies that ultimately will put their entire line on the Web and in the store will not start out that way. Theyâll do a limited selection first then add more products later.
The third option is what I call the Grainger model. Grainger has far more products on their Web site than they have even in their catalog, and they have more in their catalog than they do in their physical locations. The idea here is to put products on the Web where they can be easily searched and found, and where same-day pickup is not likely to be an issue.
There's an interesting variation on this being tried by Wal-Mart. Wal-Mart only offers certain white goods, appliances, in its larger stores. It's looking at making those white goods available through the Web site. But it's also going a step farther.
What Wal-Mart is considering is a system where there will be Web site-like kiosks in smaller Wal-Mart locations that will give shoppers there access to white goods and other products that are only stocked in larger locations.
Making It Work
The way you make your decision about what to put on your Web site should be based on strategic or tactical concerns, not technological ones. Technology can do just about anything you want. What it can't do is make a good business decision about how the Web site fits into your total business.
Created/Revised/Reviewed: 30 July 2002
This is only one Big Idea. You'll find more in Wally's book, What's the Big Idea? and in his Big Idea column. There's a complete list on the Main Big Idea page. You may also order the book by clicking here.
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