Executive SummaryPhysical retail, e-retail, and hybrid retail companies offer different advantages a...

1. Hybrid Retail: Integrating E-commerce and Physical Stores.
Executive Summary
Physical retail, e-retail, and hybrid retail companies offer different advantages and challenges.
Which is best? The authors describe a comparative model to evaluate each type of retail operation
and conclude that, despite a few disadvantages, hybrid retail stores combine the best of e-retail with
the best of physical retail. They believe a hybrid model may be the formula for future successful
retail businesses.
Truths once held to be self-evident are being challenged as traditional bricks-and-mortar retail
stores implement e-commerce strategies to compete with pure e-retail companies. Traditional
wisdom assumes that Web-based retail is a threat to long-established retailers such as Wal-Mart,
Home Depot and Sears. The logic is that these national retail chains are burdened with an expensive
network of physical stores that are supplied through a costly complex distribution network. Recently
Jeff Bezos, founder and CEO of Amazon.com, flatly stated that pure Web-based retail would always
offer the consumer a greater selection of products at lower prices than traditional retail stores. Is
this true? A closer look at the factors that drive Web-based sales indicates that many of the
attributes enjoyed by traditional physical retail stores may actually prove advantageous for online
retail success. Physical retail is considered first-generation retail.
The second generation of retail selling began with the advent of electronic retail (e-retail). Universal,
24-hour-a-day access to a centralized order processing and distribution system is the hallmark of e-
retail. A well-designed Web site provides the customer greater ease and speed in access, shopping,
and buying than physical stores do. In addition, Web technology allows companies to personalize the
shopping experience by guiding the consumer to parts of the site that are in line with the customer's
interest profile. The process of online buying allows the business to create a consistent,
personalized, and efficient shopping experience. In addition, the automated and centralized business
processes of e-retail allow for a wide variety of highly discounted products.
Amazon.com, one of the leaders in e-retail, continually receives high marks for customer service.
Their Web site is designed to speed the consumer through the process of selecting and ordering
books, music, videos, toys, electronics, and home improvement tools, while giving reassuring,
personal service at highly discounted prices. Products are typically drop-shipped using delivery
services such as UPS and FedEx. The combination of efficiency, discounted prices, and personal
service is why Amazon.com is frequently mentioned as a model of customer service for businesses on
the Web.
Traditional retail companies have tried with varying degrees of success to compete with the e-
retailers. Even though its Web site has yet to make a significant contribution to its total revenue,
retail giant Wal-Mart has publicly stated its intention to stake a leadership position in e-commerce.
At Office Depot, Bill Seltzer, executive vice president and chief information officer, spends nearly
one-third of his time planning and initiating an electronic-business strategy. Sales through Office
Depot's enhanced Web sites totaled $219 million for the first three quarters of 1999 and rose more
than 492 percent from the previous year, according to an article by C. Wilder published in
Information Week. Yet Web sales account for just three percent of the company's total annual
revenue. Even less-aggressive retailers admit that the potential for synergy between physical stores
and e-retail exists. For example, Rangnar Nilsson, chief information officer for Karstadt (Europe's
largest department store chain), was quot ed in Harvard Business Review as saying that he believes

2. "e-commerce can be a true extension of shopping in the physical world, but not all stores are
currently in a position to take advantage of it."
In many ways the retail industry is trailing other sectors of the economy in e-commerce. For
example, in a December 1999 survey of 375 businesses and information technology managers,
businesses in the retail sector estimated that 7 percent of their company's total revenue came from
their Web site, 10 percent of Web site visitors buy online, and only 31 percent route e-business
customer inquiries to a customer-relationship database. This compares unfavorably to the IT and
financial services (FS) sectors, where 18 percent (IT) and nine percent (FS) of revenues are Web-
based, where 10 percent (IT) and 23 percent (FS) of Web visitors buy products online, and where 58
percent (IT) and 42 percent (FS) of businesses deploy customer-relationship databases. Yet, in spite
of these numbers, more than 61 percent of all retail organizations either currently have or have
planned a Web-only business division. Clearly there are high expectations among retail businesses
with regard to e-commerce.
The third generation of retail will be characterized by hybrid organizations that combine the best of
e-retail with the best of traditional bricks-and-mortar retailing. According to the Harvard Business
Review article, prognosticators such as John Quelch, dean of the London Business School, believe
that hybrid retail, may work "for supermarkets, wholesale clubs, and retailers that offer a great
assortment of mostly low-end merchandise." Others see a broader role for hybrid retail, in which
retailers of products that buyers must see in person before they buy view their physical stores as the
key channel for acquiring and building relationships with customers and where Web sites are set up
as fulfillment channels, organized to handle repeat orders at a low cost.
The purpose of this article is to compare and contrast physical retail, e-retail, and hybrid retail
across a variety of dimensions. These dimensions are based on a model of a retail system that
considers both the customer's purchasing experience and the retailer's fulfillment processes. The
results of this analysis are used to explain current developments and forecast future developments in
how retail businesses adapt to e-commerce.
Traditional catalog retail is actually an offline version of e-retail. Most catalog retailers have
established or are in the process of establishing an e-retail component of their business. This makes
their business model identical to or very similar to that of e-retail. For this reason, catalog retail is a
unique retail category.
Model of a retail system
In order to evaluate the three types of retail systems, we must look at a model of a retail system. The
model shows the measures of system success that come from the customer's purchasing experience
and from the retailer's fulfillment process. The model begins with the assumption that market share
and profitability ultimately determine the success of a retailer. Market share is determined by a
retailer's ability to attract new customers and retain existing customers; thus, the need to examine
the customer's purchasing experience. Profitability is affected by profit margin and sales volume;
thus, the need to examine the components of the retailers operations. The model is represented in a
schematic form in Figure 1.
Customer total satisfaction with the purchasing experience is defined as customer satisfaction with
the purchasing experience during all three phases of the purchasing process (i.e., pre-purchasing,
purchasing, and post-purchasing). Customer total satisfaction with the purchasing experience affects
retailer ability to attract new customers and retain existing customers. A retailer can gather
valuable information regarding customer satisfaction during the purchasing process, including

3. components of customer satisfaction throughout the phases of the purchasing process. For example,
the number of customers who purchased one or more products compared to the number of potential
customers (i.e., those who browse a retailer Web site or its physical aisles) is one indication of
retailer effectiveness in achieving customer satisfaction with the pre-purchasing experience. The
number of repeat customers compared to the total number of customers as well as information
regarding the frequency of repeat purchases are addi tional indications of the retailer effectiveness
in achieving customer satisfaction with the purchasing experience. The percentage of retained
customers among those customers who have returned purchased items is an indication of the
retailer effectiveness in achieving customer satisfaction with the post-purchasing experience.
The information a retailer gathers regarding customer satisfaction with the purchasing process can
be used to plan marketing policies for each of the three phases of the process. Implementing specific
marketing policies may increase customer total satisfaction with the purchasing experience but may
reduce profit margin because of the cost associated with implementing such policies. For example,
stores that have frequent large promotions to attract customers may end up selling larger amounts
of products for a smaller profit margin. Similarly, retailers that increase the number of sales
associates and customer service representatives or maintain a no-hassle return policy may attract
more customers but end up reducing the profit margin.
The effectiveness of the information system that coordinates and integrates its supply chain affects a
retailer's ability to ship products efficiently from suppliers to customers via the retailer's distribution
system. The efficiency of a supply chain is determined both by the level of inventories kept at
distribution centers and stores as well as by the retailer's cycle time. A retailer's cycle time is
defined as the time that elapses between ordering products from suppliers and delivering them to
retailer's customers. The level of efficiency of a retailer's supply chain affects its profit margin. The
level of coordination of a retailer's supply chain with its various marketing policies and with real-
time point-of-sales information affects a retailer's ability to offer customers the products they want,
when and where they want them. This ability affects a retailer's effectiveness and, ultimately, its
profit margin.
Criteria used to evaluate the different retail systems are defined in the next section. These criteria,
used in conjunction with the aforementioned model of a retail system, make it possible to identify
the most effective retail system.
Physical retail, e-retail, and hybrid sales systems are evaluated below according to a variety of
criteria. The criteria are compiled into two groups. The first group of criteria is related to the
customer's experience with the purchasing process and is evaluated in Figure 2. The second group
of criteria is related to retailer advantage and is evaluated in Figure 3.
Comparison from the customer's view
In Figure 1, the criteria are grouped according to their phase in the purchasing process. The first
criterion considered in the customer's pre-purchasing experience is the spectrum of products
offered. Physical retail offers a much narrower spectrum than e-retail because cost is prohibitive. E-
retailers are able to build warehouses in remote areas where land is cheap because they need not
draw customers to their physical location. Physical retailers, to the contrary, must pick sites that are
easily accessible and zoned for consumer traffic. Such sites are limited and, as a result, cost more
and are often linked with higher taxes. Since the presentation of products makes for customer
appeal, physical retailers actually use more space per item than e-retailers. Displays must be eye-
catching and allow room for customers to move about the store. The same number of products will
necessitate more space for a physical retailer than for an e-retailer and, as a consequence, result in

4. greater inventory cost per item. T hus, the physical retailer has fewer items available than the e-
retailer because space is either unavailable or not affordable. Since the hybrid retailer has an e-
retail component, it can offer the same wide spectrum of products as the e-retailer and thus shares
that advantage.
The second criterion considered in Figure 1 is information related to product availability E-retail has
the potential to provide comprehensive information to the customer online. Physical retail, on the
other hand, has only limited information available to the customer. This information is accessible via
brochures, ads, etc. Hybrid retail, with its e-retail component, shares the competitive advantage with
e-retail regarding information on product availability. If, however, the hybrid retailer makes online
information regarding product availability in the physical store available to customers as well, the
hybrid may increase the effectiveness of its physical store component. A kiosk in a physical store
that provides online information regarding product availability will likely improve the physical
store's advantage. The advantage will be limited, however, because customers must come to the
store to get the information and will likely have to wait in line to access it. Since information systems
that are easily navigated and provide information on product availability along with appealing
graphics would typically necessitate costly upgrading from existing systems, some physical retailers
would find them too expensive.
Retail stores typically offer incomplete lines of particular products. A shoe store, for example, might
sell a certain shoe in narrow and medium widths only. Retail stores also often sell only selected
brands of merchandise. Since retail stores must sell what they carry, they are unlikely to provide
information about the full range of competitive products. Because e-retail is not constrained by
space limitations or regional tastes, e-retail can sell and provide information about the whole
spectrum of products. Furthermore, there is no salesperson to push particular items. Instead, e-
retail customers read available information from independent sources that may be provided online,
such as Consumer Reports, and then make an independent evaluation according to personal need.
Thus, the completeness of information criterion listed in Figure 2 ranks e-retail and hybrid as high
and physical retail as low.
On the criterion of completeness of information regarding availability of sales merchandise, retail
stores rank low. Sale flyers advertise a range of discounts (e.g., 20 percent to 25 percent off) on a
range of products (e.g., many name-brand suits). Product availability varies with the store, as sales
merchandise is often that which remains from a current product line at the end of a season. Thus, a
customer knowing the general parameters of a sale goes to his local department store to find that
only three brands of suits are on sale and all available are sized extra large. E-retail lists specific
items along with specific sale pricing and thus ranks high for completeness of information on sales
merchandise. Hybrid retail ranks high as well due to its e-retail component. If hybrid retail provides
information online about sale items in their physical stores and allows the potential customer to both
access this information and reserve a particular item at a nearby store for immediate pick-up, the
hybrid retai l offers a customer advantage.
Customers at physical retail stores are constrained by store hours. Customers at e-retail and hybrid
retail, however, can make purchases any time. Further, with portable computers, they can purchase
from any location. Even customers who are out of town can purchase from a favorite Web site.
Customers at physical retail stores must be near the store of choice.
E-retail is less advantageous when one considers ease of product retrieval. Consumers at physical
stores and at those hybrids where customers are allowed to pick up e-ordered merchandise at a
physical store are able to obtain products in the most timely manner. There is no delay for shipping
and handling. When time is critical, consumers are most likely to frequent the type of store that

5. allows for immediate pick-up. This gives customers at physical retail and the specified hybrids a time
advantage. Physical retail and hybrids complement this advantage with an expense advantage.
Consumers who pick up items save on shipping and handling costs. The lower the total purchase
price, the higher the contribution of shipping/handling cost to overall price and the less appealing
the product. This criterion is related to both the pre-purchasing and purchasing experience.
The ability to communicate with a live person regarding product characteristics is the first of the
criteria related to the customer's experience during the purchasing process. While salespeople in a
retail store do not typically offer complete product information, they do offer some advantages. A
good salesperson can often offer useful insights gleaned from experience. For example, while sales
personnel in a camping goods store may not be able to offer information on a brand of product not
carried in the store, they might be able to tell you whether such a product in general is worth its
weight when backpacking in Canada. Salespeople who know their merchandise are also often helpful
in matching products to customer needs. In e-retail, for example, it may be difficult to determine
exact color or fit of clothing. A salesperson, however, can look at a pair of pants that a customer is
wearing and suggest specific sweaters that might be coordinated with them, thereby saving time
and confusion. Many customers val ue the personal warmth as well as the expertise of a salesperson.
For many people, the smile accompanying a sales associate's comment that "tapered legs are
flattering on you" makes her invaluable. Retail stores and hybrids rank high for ability to
communicate with a live person regarding product characteristics. E-retail stores that offer e-mail or
phone communication with a live person rank in the middle. While such communication may not be
as effective as communication with a salesperson who can see both the customer and the
merchandise, it is better than no communication at all.
Another criterion related to the customer experience during the purchasing process is the ability to
shop with a remote friend. E-retailers and hybrids offer consumers one opportunity that physical
retail stores cannot. E-retail and hybrids allow consumers who are separated by large physical
distances to shop together. By browsing together online at the same e-retail Web site while chatting
simultaneously on the phone, Mom in St. Louis and Grandma in Phoenix can pick out a gift for Suzy
in Los Angeles.
The return policy pertains to the post-purchasing experience. Returning items to a physical store is
an easy task. The customer goes to the store with the merchandise and is helped by a salesperson or
manager. Returning items to hybrid retail is equally easy if the hybrid allows the e-customer to
return items to a physical store. Returning to an e-retail store, however, is more complex. The
customer may or may not have to contact the company via e-mail first. Then the customer must deal
with re-packaging the merchandise before taking it to the post office or engaging a delivery service.
Customers may have to pay for shipping and insurance and may later have to seek reimbursement.
Comparison from the retailer's view
The criteria outlined in Figure 3 are those dealing with retailer advantage with respect to
effectiveness of marketing policies, information system, and supply chain. The first criterion related
to marketing policy is the ability to hold regional sales. Retail stores and hybrids garner the
advantage in sales flexibility. Both are able to hold regional sales as needed to promote purchase of
slow-moving inventory. Product sales vary according to locale. The season for winter merchandise,
for example, might be shorter in the Midwest than in the North, so sales on winter apparel might
begin earlier in Missouri than in Minnesota. E-retailers, however, cannot hold small-scale regional
sales. When competing with regional sales, e-retailers must offer nation-wide reductions. This means
that e-retailers must lower product costs unnecessarily in certain regions if they are to compete with
retail stores. If they choose not to compete with regional sales in a timely manner, they must absorb

6. inventory costs until a nation al sale is productive. Thus, e-retailers lack the sales flexibility that
retail stores and hybrids enjoy.
E-retailers lose in more ways than one when retail stores and hybrids offer regional sales. Customers
who are lured inside a physical store for a sale may be tempted to buy multiple items. Customers
may buy items that are attractively displayed or they may be reminded of items they need once
walking through the aisles. Impulse shopping is anticipated from physical retail customers. Many
people wander through malls as a form of entertainment. They socialize with friends and pass time
while browsing. While e-customers may also do some impulse shopping as they browse online
through pictured items, they are probably less apt to do so because pictured objects are somehow
less engaging than physical ones. Hybrid retailers who allow customers to pick up and return items
at a physical store may have the ultimate advantage of tempting impulse buyers. Customers who
may not be tempted to make additional purchases online will have a second opportunity to buy on
impulse once they are in a physical store to pick up an ele ctronically ordered item. There they will
be lured by the physical displays of merchandise.
E-retailers and hybrid retailers must price items for national distribution. They must often disregard
regional market differences if they are to compete nationally Although an item might bring in a
higher price in one section of the country than another because of customer demand, the e-retailer
and hybrid retailer must consider all markets when establishing a single price. If the e-retail price is
too high for some geographic areas, the retailer may sacrifice customers. If the e-retail price is too
low for some geographic regions, the retailer may sacrifice profit margin. Hybrid stores are in a
unique position. To attract e-customers, they must choose a competitive price for electronically
ordered merchandise. If the same merchandise is sold in the hybrid's physical store, however, the
price must reflect local market value. The hybrid retailer will lose profit margin at the physical store
if it sells the item at the e-retail price. It may lose customers at the physical store, however, if the e-
retail price is considerably lower than the price at the physical store. Hybrid stores have a complex
pricing issue because they are in the unenviable position of competing with themselves as well as
with physical and e-retail competitors.
Companies are able to collect information regarding customer buying patterns effectively when
customers shop online. As online transactions are recorded, information regarding customers and
the products they choose becomes available. Customers in physical stores may refuse to provide
personal information such as address and phone number. For this reason, e-retail and hybrid stores
have the advantage over physical retailers of being able to collect more complete information
regarding customer buying patterns. E-retail and hybrids can use collected information to tailor
their marketing efforts to better match the needs and tastes of customers.
Buying patterns and interests of e-customers can be incorporated into the expert systems of e-
retailers so that Web sites can be personalized to suggest products a customer may desire. In other
words, once the expert system analyses data regarding the past buying patterns of a particular
customer and compares it with the buying patterns of other customers with similar interests, it can
suggest other products that may suit the customer's interests. Amazon.com has such a system. The
company analyzes the characteristics of books a customer buys and then suggests other books that
may be of interest. This marketing capability can increase sales for e-retailers and hybrids.
E-retailers' computer and information systems, which enable the retailer to conduct virtually all
business transactions online, are more complex than those of physical retailers. Hybrid retailers that
allow e-customers to pick up and return products at physical stores must be able to trace and
coordinate the movement of materials, orders, and financial transactions among the components of
their e-business and their physical stores. This necessitates an even more complex computer and

7. information system. The ability of a hybrid retailer to allow e-customers to obtain information online
regarding sale items at physical stores and to allow those customers to reserve merchandise in
physical stores requires a still higher degree of complexity of computer and information systems.
The more complex the computer and information system, the more costly the installation and
maintenance of such systems. For this reason, physical retailers that require a less complex system
than e-retailers and hybrids have an advantage.
Criteria dealing with a retailer's supply chain include the ability to take advantage of electronic data
interface technology and quantity discounts for purchasing from suppliers as well as discounts for
shipping costs. EDI technology requires the transmitted data to be set in a standardized format that
has been agreed upon by a retailer and its suppliers. All the application software involved in
generating the required data must be compatible. This requires a high degree of cooperation and
coordination among retailer and suppliers. Such cooperation and coordination is justified only
between a retailer and its high-volume suppliers. Since e-retail and hybrid are both dealing with
large purchasing volume for a wide range of products, they can take advantage of EDI technology
more than physical retailers that have a much smaller range of high-volume products.
E-retail and hybrid stores purchase large volumes of a wide range of products from suppliers. This
puts them in a much better bargaining position for quantity discounts than physical retailers.
Furthermore, e-retail and hybrid companies are also in good bargaining position when negotiating
transportation costs for shipping a high volume of purchased products from suppliers to the stores'
warehouses. These cost savings give e-retailers and hybrid retailers a competitive advantage over
the physical retailer.
The criteria related to customer experience with the purchasing process, summarized in Figure 2,
indicate that e-retailers may be able to achieve competitive advantage with regard to:
* spectrum of products offered
* information about product availability
* completeness of information about competing products
* completeness of information regarding availability of sale merchandise
* customer ability to purchase products from any location at any time
* customer ability to shop with remote friends
Physical retailers may achieve competitive advantage over e-retailers with regard to:
* timeliness and cost of product retrieval
* ability to communicate with a live person about product characteristics
* effectiveness of return policies
The criteria related to retailer advantage, summarized in Figure 3, indicate that e-retailers may
achieve competitive advantage over physical retailers with regard to:
* completeness of information about customer buying patterns

8. * ability to take advantage of EDI technology
* ability to take advantage of quantity discounts for purchasing and shipping costs from suppliers
Physical retailers may achieve competitive advantage over e-retailers with regard to:
* ability to hold regional sales
* potential gain in business from impulse shopping
* complexity of computer and information systems
This evaluation concludes that e-retailers have a competitive advantage over physical retailers based
on some criteria while physical retailers have competitive advantage over e-retailers based on other
criteria. Hybrid retailers who have both e-retail and physical store components can benefit from the
advantages of both. With effective coordination and integration of the two components, hybrid
retailers can achieve competitive advantage over both e-retailers and physical retailers. Not only do
they garner the advantages of both individual components, they can provide customers with a higher
degree of flexibility than either e-retailers or physical retailers. Hybrid retailers can allow their e-
customers:
* obtain online information regarding product availability in physical stores
* obtain online information regarding sale items at physical stores
* reserve merchandise in physical stores online
* pick up and return items ordered online at physical stores
These options can provide customers a degree of flexibility and convenience that may give hybrid
stores the competitive advantage over both e-retailers and physical retailers.
Doing all this, however, requires a high degree of coordination, as the components of physical retail
and e-retail must be integrated. Hybrid retailers must employ more complex computer and
information systems than either physical retailers or e-retailers do. This is costly and complicated
and might well be considered a disadvantage of the hybrid system. The only other disadvantage
hybrid retailers face is that they must deal with the impact of a price differential between products
sold in different geographical regions. Hybrid retailers must simultaneously compete locally and
nationally on prices. These two limitations of hybrids may be easily outweighed by the many
advantages.
Conclusions
Hybrid retailers enjoy several distinct competitive advantages in the marketplace. The efficiencies
offered by Web-based technologies combined with the effectiveness in customer relationship
management offered by physical stores suggest the emergence of a third generation of retail/ Today,
consumers are increasingly using both online and physical stores in the purchase process. For
example, The Retail Power Shift by S. Morisette, K. Clemmer and W.M. Bluestein indicates that 31
percent of online consumers use the Internet to research goods that they buy in physical retail
stores. In addition, customers are willing to change their point of purchase once they have
established a brand or product loyalty. For example, online customers say that they are significantly

9. more likely to repurchase products from their online merchants than from traditional retailers.
Major retailers are adapting their strategies to meet the needs of third-generation retail. Home
Depot has promised a Web site that will be able to check store inventory online and will facilitate
online product ordering with the option of home product delivery or store pick-up. Wal-Mart may
take advantage of its 2,500-unit nationwide store base by creating drive-through pick-up stations to
allow online customers to collect their orders immediately from their neighborhood store. In Japan,
online merchants deliver merchandise to local 7-Eleven stores, where customers can pay cash for
the items received. Finally, Radio Shack is allowing online customers to return items to any one of
5,000 local Radio Shack retail locations.
In spite of these major developments in the retail sector, it is unclear whether any of these retail
giants have developed a cohesive strategy for integrating e-retail with existing physical stores. For
example, there has been little discussion about how the physical retail stores themselves will need to
change. It has been suggested that for some retailers, the physical store will become a low-squar-
-footage showroom where a majority of product inventory is shipped from regional fulfillment
centers. Others see Web-enabled kiosks providing customers with help finding items in the store,
allowing customers to order items not in stock, and providing detailed product information. Still
others see stores with electronic shelf labels and signage allowing retailers to change prices and
promotions dynamically in response to customer demand, competitive conditions, and product
perishability. The sheer size of many retail chains may prove important in terms of brand awareness
and scale economies. Yet none of these st rategies will be successful without a tightly integrated
fulfillment process that combines the best of e-retail with the best of the physical store.
Traditional bricks-and-mortar retailers are not the only retailers to face change. E-retailers must
develop specific strategies to meet the needs of their customers. Often this will require the presence
of physical stores. Just as computer retailers such as Dell and Gateway have developed a network of
third-party businesses to service their products, other retailers will seek to establish relationships
with local companies to facilitate product pick-up, servicing, and return. In an effort to service their
customers better, some e-retailers have begun establishing a network of physical stores (e.g.,
Gateway Computers). In addition, traditional catalog companies such as Lands End and Eddie Bauer
have expanded their operations to include e-retail.
Two fundamental pieces are required for business success in third-generation retail: a well-focused
strategic vision and well-integrated information architecture. Business must develop strategies that
balance the advantages of a physical store presence with the efficiencies offered by Web-based retail
technologies. These business strategies must take into account the customer's satisfaction with the
overall purchasing experience and should seek methods to attract new customers and retain existing
customers. Finally, businesses must build a flexible information architecture that facilitates the
retailer's marketing and supply chain logistics, as well as the actual purchasing process. For hybrid
organizations, this requires a high degree of coordination, as the information components of physical
retail and e-retail must be integrated.
The Authors
Reuven R. Levary is professor of decision sciences at St. Louis University. He received a Ph.D. in
operations research from Case Western Reserve University and is co-author of Quantitative Methods
for Capital Budgeting and editor of Engineering Design: Better Results Through Operations
Research Methods. His articles have been published in a variety of professional journals. Levary
serves on the editorial boards of several journals; he is a fellow of AAAS and a member of INFORMS,
IEEE, and the Society for Computer Simulation.

10. Richard G. Mathieu is an associate professor of management information systems at St Louis
University in St. Louis, Mo. He is on the faculty advisory committee for the graduate program in
operations and supply chain management in the School of Business and Administration at St. Louis
University. He received his Ph.D. and M.S. from the University of Virginia and his B.S. from the
University of Delaware.
For further reading
Evans, P. and Wurster, T.S., "Getting Real About Virtual Commerce," Harvard Business Review,
Nov./Dec. 1999.
Gallaugher, J., "Challenging the New Conventional Wisdom of Net Commerce Strategies,"
Communications of the ACM, July 1999.
Landry J.T., "Electronic Commerce: A New Take on Web Shopping," Harvard Business Review,
July/Aug. 1998.
Maruca, R.F., "Retailing: Confronting the Challenges That Face Bricks-and-Mortar Stores," Harvard
Business Review, July/Aug. 1999.
Morrisette, S., Clemmer, K., and Bluestein, W.M., The Retail Power Shift, Forrester Research Inc.,
1998.
Wilder, C., "Retail Turns to Click and Mortar," InformationWeek, Sept. 27, 1999.
Wilder, C., "The Fast Track to Becoming an E-Business," InformationWeek, Dec. 13, 1999.
COPYRIGHT 2000 Institute of Industrial Engineers, Inc. (IIE)
No portion of this article can be reproduced without the express written permission from the
copyright holder.
Copyright 2000 Gale, Cengage Learning. All rights reserved.
http://www.thefreelibrary.com/Hybrid+Retail:+Integrating+E-commerce+and+Physical+Stores.-a0
68025759