Having recently seen the report of HMV going into Administration, as well as Jessops (where I once worked), I tried to work out what one key/main feature both these stores had for going into Administration/closing their doors for good. After seeing comments such as 'It's because everyone goes online to get the best deal' and 'The companies just wanted money and didn't give any service to customers anymore', I think I came up with a pretty justified explanation.
Both of these companies had two separate pricing systems: An online price and an in-store price.
What are the cost differences of having an online store to an actual shop?
Well, online, you have to pay for the web address (yearly payment usually), Graphics and web design, people to run it, customer services, complaints service, helpline, and probably a lot more than I have noted.
But, put into comparison with a shop, it seems cheaper.
For a shop, you will have to pay for, rent of premises (or cost to buy unit), staff to work daily, cover staff if staff are unable to work shifts, managers, area managers, regional managers, uniforms, units in the store (shelving, etc.), shipment of goods, the cost of the goods themselves, Graphic design for the store promotions, interior designer, customer services, complaints service, helpline, etc, etc.
So, if it costs more to run a shop than an online store, why have cheaper prices on the online store, wouldn't you want to encourage shoppers to use the physical shop??