Shopping the Forbidden
Protected Brands on the Web
By Ron Goldberg
Some time ago, I was involved in a dotcom (OK, let's not go there) that among other things, served as a content-driven shopping aid for buying consumer electronics. Many of the products were available for online purchase, while others, because of vendor policies, could only be "fulfilled" at authorized brick-and-mortar dealers. Because E-commerce and the CE industry's reaction to it were both in a nascent state, the methods of protection for brands and product prices were still being established.
A brief look at the Web circa 2003 clearly shows that the situation hasn't evolved all that much. The concept of "protected" products is one that's be-coming an increasingly uphill battle to uphold, as our I-Spy mystery shopper was able to demonstrate. We asked him to trawl the Web looking for A/V equipment you're not supposed to be able to buy online. We sent him off looking for DLP projectors and plasma screens, high-end receivers, speakers and digital media servers, all from brands that, because of protection policies, shouldn't be sold on the Web. Which is not to say that they can't be bought on the Web.
A few quick trips down Google lane into sites like Yahoo Shopping, DealTime and MySimon, even auction sites like eBay, show that traditionally protected specialty brands are widely available, often at prices that would give an authorized dealer the shakes. One big reason why these specialty and high-end products are the C-tailer's lifeblood is because you can't find them just anywhere. The problem was, our shopper was able to find them almost anywhere.
One of the C-tailer's competitive advantages is that they'll typically carry higher-end, higher-margin products than the mass merchandisers. But what happens when those margins are undercut by sellers who haven't had to make any investment in retailing, a showroom or product training, and maybe don't even have a physical plant in which business is done?