A ‘pureplay’ business is one that only operates online, it has no real-world stores. Some pureplay stores don’t even have any physical inventory – selling virtual goods that have unlimited stocks.
Some of the earliest online stores made the most of the pureplay model. Well known brands such as Amazon and Ebay redrew the supply chain, doing away with the need for stores.
Pros of a Pureplay Ecommerce Model
Such a model can have significant cost savings. The business model that made McDonalds and Starbucks famous, based on leases and property and rent dissapear with pureplay.
You also don’t have to staff an online store, the customer experience is the same for every buyer, irrespective of time or place. Opening hours are 24/7.
A business that has no stores may not need warehouses either. Drop shipping allows for products to be delivered directly from the manufacturer to consumer once an order is placed. This can have a big positive impact on cashflow. #
Cons of a Pure-play Ecommerce Model
A pureplay store isn’t cost free. Depending on your locatiton and business, the cost of delivering goods to customers is something that has to be factored into the business model.
Customers may be wary of a new brand that they have never heard of before. There is still a generational difference between how consumers shop, with many still not ready to trust online stores. Building a trusted brand takes time, especially if you don’t have any physical presence. Some pure-play brands have subsequently opened stores to cater for this issue of customer perception.
A pureplay Ecommerce website may require significantly less investment to get to market. While this may be seen as a positive, it also means that the barriers to entry are much lower and expose you to more competition. Being too early to market may lock you into inferior technology, allowing competitors to ‘leap-frog’ you and get to market cheaper and more quickly.
While you may save on store personnel, you still have to provide customer service. Once you set an expectation that a customer can shop from you 24/7, they will expect that you provide the same hours for customer service.
In the end, your customers and the products you sell will determine if Pure-play is for you.
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