the key to success for e-commerce - combining the virtual and the physical?

One of my pet theories is that to be successful in e-commerce you must combine the virtual and the physical, i.e. there should be a physical/meatspace element to your product. In the long run, people seem more prepared to pay for physical goods whereas the price of pure software degrades. Combine the two and you have low running costs with sustained prices. If your product is software only then you will probably require continual innovation to sustain the price, you may also be more susceptible to competitors replicating your offering.

Example 1:

Threadless sell t-shirts online. Which isn't very hard to copy. However, they enable designers to upload their images to be put on the shirts and sold, and give them a fee. So, they don't have to employ designers to physically sit in their offices and design Tees. Plus, the community weeds out the wheat from the chaff. This is still fairly copyable, but they've built up enough of a reputation and community to hold off much of the competition.

Example 2: Nabaztag

This wireless rabbit sits on your desk and responds to events such as email receipts. Money can be made up front with the sale of the hardware and then over time through the sale of services. It's hard for a competitor to come along and steal your customer by selling them their rabbit/llama/whatever-it-is.

It's All In The Game blog (c) 2005-16 by Jez Nicholson