Published in El Pais, February 27th 2020.
Online sales are booming and more and more people are buying through this medium; however, online sales will not be 100%. Although for now they are on the rise, they will stabilize. In other words, there are consumers who prefer to make some purchases personally or physically and other purchases will be made online.
Dr. Roberto Alvares’s article on how to do business at the Ollie store is just what is happening with the market. The article mentions that online purchases continue to grow with figures that exceed 513.6 billion dollars in 2018 and that many physical stores closed. Estimates are at 3400 stores in the United States alone. Many consumers prefer to shop online but not everyone buys their products in the same way. There are certain products that need to be seen in greater detail or perhaps because of the price they prefer to make verify the type of material, etc. However, most online purchases (in the United States) are due to the great distances that exist between workplaces, homes and businesses. The schedules also play a role. When the consumer has time time to visit a store and the product is not the available he has spent valuable time, energy and fuel to go to that mall.
However, there are Ollie stores that do not have online sales. Their business model is to have only physical sales and they are firmly committed to this. The numbers in its sales for the year 2019, according to Forbes, show net earnings of more than 150 million dollars. Therefore, we can deduce that the market is very large and there are consumers who like to make purchases in a traditional way, that is, go to the store to find the product they want. On the other hand, the formula that Ollie has, is not only to bet on the client to go and choose the product. The company works with the best brands, which translates into quality and of course they also offer the lowest prices. It is mentioned that, a comparison of 32 items was made between the prices of the giant Amazon and Ollie and the result was that two items were 70% cheaper, 8 products were 65% cheaper and the rest of the products, on average were 42% cheaper
Among other strategies, Ollie is committed to new products and continually renew inventories. This is very different from traditional stores like Walmart, which keeps the same products on its shelves for a long time and with that keep the profit margins to a minimum. Ollie bets on new products with higher margins and thus have higher profits.
I am sure that each market is very different. Bolivia is also different and has a different consumer culture from the United States. However, online sales in Bolivia are also on the rise, but not exclusively, physical stores are also successful.
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