Mall
Anchors Away! The Franklins
Discover Online Shopping
Terence
L. Holmes, Murray State University
Drew Franklin put the box back on the shelf to the protests of his son, Ian.
"But Dad! I really want that one, please!" Drew knelt and looked into the pleading face of his
six-year-old. He took a deep breath
and exhaled slowly, wondering whether buying a model ship was a good idea after
all. He and Ian had visited four
stores in the past two hours. From
Toys R Us to Wal-Mart and now this specialty store, Hobby Lobby, the story had
been the same-limited selections and seemingly unlimited prices.
In the discount stores, only a model of the Titanic was available.
Ian and his grandfather (mostly his grandfather) had built that model
during the summer. In fact, that
work was what had triggered Drew's interest in building a model with Ian.
"Ian, this is the fourth store we've been in today.
I just think . . ." Drew looked at the box he had just replaced, $30
for a small model of a World War II era destroyer.
"I know this is too much to pay.
We just started looking." "You
never do anything I want to do!" Ian pouted.
Drew thought for a moment. For
a marketing professor he felt at a loss about what to do.
Then he remembered the electronic commerce material he had begun
gathering in preparation for a new class for the next school year. Many consumer products companies were jumping into direct
sales on the Internet after seeing the success of Amazon.com and Dell.
He picked up the destroyer model again and read the manufacturer's
information. Tamiya of Japan made
it. No Internet address.
He picked up a model of the Titanic and read the box.
This model was made by Revell-Monogram and featured the company's
Internet address (http://www.revell-monogram.com).
Drew put the model back on the shelf and looked at Ian. "Let's go home and look at what Revell has on its web
site. If we don't find anything
there, we'll buy one of the models we've seen today, probably that aircraft
carrier at Toys-R-Us." Ian
brightened at the thought of doing something sooner rather than later.
Once at home, Drew logged on to America Online and started to type in the Revell-Monogram
web address, then stopped. "I
can't remember how they wrote the name. Was
there a hyphen in there?" he asked aloud.
Ian just looked at him. "I
don't know." Drew had an idea. "Go get your Titanic box.
Revell made that one so the address might be on there somewhere."
Ian returned with the box and Drew found the address and typed in the
URL.
Drew and Ian visited the Revell-Monogram site and found current models and new
releases, and also that Revell was a subsidiary of Hallmark Cards.
Nowhere on the site was any information about ordering models.
Instead, the Revell site had a search engine so the visitor could find
dealers nearest their own location. Drew
was frustrated and Ian was confused. "Why
won't they sell them to us Dad?" Drew
shook his head. "Probably
because they're not set up to take small orders, only orders from stores."
"Can we go buy that one at the last store we went to today?"
"Maybe," Drew answered. "First,
though, let's try searching for other stores that might sell online."
He clicked on the Favorites icon and selected Yahoo! to begin searching,
not really knowing what to look for. He,
too, was getting confused.
Ian sat and fidgeted while Drew typed several different queries.
He typed in "models" and more than 5,000 sites were found.
He changed that to "model ships" and Yahoo found about 80
sites. Looking these over, Drew saw they were nearly all museum-related.
Next, he used "hobby shops" and more than 200 sites came up.
"Let's look at a few of these and if we don't see anything, we'll go
buy one today," Drew said.
Several web sites were run by model building enthusiasts, offering articles,
tips, and pictures of their collections. Two
sites stood out, however: Model
Expo (http://www.modelexpoinc.com) and
Internet Hobbies (http://www.internethobbies.com).
Drew and Ian looked through the online catalogs, which were exhaustive.
At Model Expo, many types of model planes, trains, ships, trucks, and
cars were featured. Prices ranged
from a few dollars to more that $200 for remote-controlled, large-scale
vehicles. One wooden steamboat
model featured an optional miniature steam engine and remote control for $250!
Drew clicked on plastic ships back at the catalog's opening page, because
that type of model was what he had assembled thirty years before.
He and Ian then saw pictures, descriptions, and prices for dozens of
ships available from several manufacturers.
Prices were one half to one third, sometimes more, of the prices they had
seen in the stores earlier that day.
The story was the same at Internet Hobbies.
This online store featured similar prices but more manufacturers than
Model Expo. "Still," Drew
thought, "the basic types of models I'd like to start with are the same at
both places." The Arizona
and Missouri battleships were $7.49 at Model Expo and $6.99 at Internet
Hobbies, while the Nimitz aircraft carrier was available for $9.99 at
Model Expo and $8.99 at Internet Hobbies. "I
wonder about shipping costs," Drew thought. He checked and found very similar charges.
Interestingly, Internet Hobbies charged a flat rate of $7.50 for orders
up to $75, then the percentage stayed at 10% of the order.
Model Expo had a flat $5 per order charge that rose to 10% of the order
after $50.
Drew called Ian, who had become bored and had gone to his room to play, back to
the computer. After describing more
than the six-year-old wanted to hear, he asked Ian for his top choices from what
they had viewed. They settled on
two models, the Arizona and the Queen Mary luxury liner. Ian went back to his room.
Because of the small order, Drew felt the Model Expo store had offered a
better value. He clicked on the
icons to place the models in his shopping cart.
After quickly checking that Ian was still not around, he also placed the Missouri
and Massachusetts battleships and the Nimitz into the cart.
These, he thought as he checked out, would be good for Christmas and for
Ian's next birthday. The total, with shipping charges, came to $42.38.
As he entered the required credit card information, Drew smiled.
Although it had taken all day, he was getting five model ships for only
$10 more than the cost of the single model he had held in his hands earlier.
And no sales tax!
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Questions
What
actions could brick and mortar retailers take to maintain their sales of
such models? Is there a threat
to their business? How
important is this part of their business?
What
could Model Expo and Internet Hobbies do to protect their business if Revell-Monogram
and other model kit makers decided to sell directly from their web sites?
Why haven't these manufacturers done so?
Construct
a multiattribute attitude model for this purchase. Use two brick and mortar stores and the two featured online
retailers and at least four appropriate attributes. How could such a model be used by shoppers like Drew and Ian?
How could brick and mortar retailers use the results?
Online retailers?
How
would the collection of sales taxes on electronic commerce transactions
change the model-buying scenario in the case?