Is Web 2.0 killing retail stores?

A lot of retailers are feeling the pinch of lost sales due to Web 2.0 and social networking. Web 2.0 has done a great deal increasing transparency online and retailers are often at the losing end, since shoppers who focus solely on price are using the Internet to find the best deal available. The focus on price is pushing factors such as customer loyalty and service away from the decision making process, as the difference in price between online retailers and brick and mortar stores can be huge. In a 2005 study conducted by BizRate Research, 923 online shoppers were surveyed, of which 87% compared online retail prices with catalog merchants as well as retail stores to find the best price.

Electronic retailers are choosing to compete solely on price, according to the marketing guru Al Ries. Promotions are all based on sales Email Marketing Software - Free Demo and low prices. Where's the work to build the brand and create brand loyalty? If this trend continues, according to Ries in a December issue of Advertising Age, the retail industry is heading for the same fate as the airlines.