On the other hand, where numerous shopping alternatives abound, the power shifts over to the consumer. The Internet may reduce a retailer s ability to generate profits based on geographic inefficiencies. However, companies can build new advantages. The company with the fastest shipping or the reputation for the best logistics may be able to leverage better, more reliable service into higher prices versus competitors with lesser reputations. The convenience advantage of the local shop goes away, the execution advantage emerges.
Execution is one way to differentiate in a crowded space.
However, it is likely that online resellers will go beyond that and will work to differentiate themselves in a much more obvious way. Thanks to technology-enabled changes, within a few years, shoppers may no longer choose a retailer based on its products but rather will select a place to shop based on the type of shopping process offered. We suspect there are others out on the horizon, but not yet as visible. Although best known for its initial product line books, the company has rapidly expanded to specialised stores including natural offshoots videos and CDs as well as less obvious product line extensions including toys, electronics, hardware and, most recently, patio furniture. The company also operates a small auction site and a second, exclusive auction site in conjunction with Sotheby s.