That’s why the announcement by Hunter Douglas Window Fashions Monday was such a bombshell.  In an email President & CEO Marv Hopkins said in part, “We have made the decision to cease sales of all Hunter Douglas brand products through the large and growing Internet sales channel, effective June 1, 2010. By discontinuing Internet sales, Hunter Douglas will lose significant sales volume in the near term.  We are confident, however, that this policy will best serve our goal of preserving and enhancing our brand image and reputation and will also lead to far greater sales through our Aligned Dealer network over the long term.”

This is a game changer. All we’ve been hearing about lately is the growth of online shopping and by extension shopping via mobile.  With this move Hunter Douglas has said, ‘Even if it hurts sales, we’ll control our brand, our standards and customer satisfaction.’  They have embraced the expertise of their extensive dealer network and in particular their top-tier Gallery dealers who have invested tens of thousands of dollars in fixtures where you can see all of their products in actual windows, sales training, e-learning and product knowledge.  This is their reward.

Hunter Douglas sold nearly $2.3 billion in 2009, this isn’t some little company with a few employees.

Online  shopping is frequently only about price, not fit or service.  Hunter Douglas’ independent bricks and mortar dealers were the ones performing the hard work of explaining to the customer what their options were and then being rewarded fixing possible mistakes when the customer ordered online.  They have expanded their dealer tools and web presence to drive business to their bricks and mortar dealers.

To help you see the impact of such a decision, look at this like Starbucks eliminating all of their licensing agreements with places like United airlines or various supermarkets so you could only find Starbucks in their coffeehouses that used water filtration, the best brewing equipment and had extensive training.  They wouldn’t let others undermine their quality name.  You can learn more about their strategy from these quotes from Hunter Douglas VP of Merchandising Joe Jankoski.

Online isn’t the begin all and end all, it still only represents about 9% of total retail dollars. Bricks and mortar stores aren’t going away and here is a company willing to stake their future to the dealers who made them successful.  Other manufacturers need to look at this because their brands can be commoditized as they are reduced to price and the brand cannot manage that online.

Maybe there’s a lesson for your bricks and mortar stores as well. Instead of chasing the fickle coupon clipping, Internet scouring cheapskates who often cause more problems then they attract, focus on your core customers.  Reward them with the integrity of your brand providing an exceptional experience and hold them tight so they know their number one priority is them – not some faceless keystroke.

Here’s the reality: major brands are segmenting visitors to their websites by person, they are tracking where you the customer went to customize their banner ads and even which page you will see when you return.   They have a valuation for each consumer relative to each SKU, they know how the consumer will react, to which offerings and when, how fast they’ll shop and what % they’ll have to eat in returns.

They can connect the dots of a customers’ age, past purchases with other online sites, household income and spending patterns. They know what the consumer zoomed in on, what they reviewed, with whom they have social media influence, what they researched on a page but purchased on another.  They can track back their online wardrobe purchases from the past six years and build a virtual closet of what the customer owns.

They know who the bargain hunters are – like a parched woman in the desert dying for a drink, the die-hard bargain hunters will wait until the price drops to what they will pay – they know they are in the distinct minority and make up those losses elsewhere.

They know who the high priced affinity shoppers are  - the 5% of people making 20% of purchases.  Because of that, they can micro-target whoever they want with a customized list of products suited to that one consumer.

How do I know this? At the National Retail Federation’s Big Show, Nielsen said they track 5.55 million transactions a day worldwide, that they slice, dice and resell that information to major online sites.

In addition, an online website cannot just be for order fulfillment but a place that engages customers.  Here’s a great one in Europe. http://producten.hema.nl/ It’s fun, it engages you, you stick around to watch it unveil itself and, if you’re like me, you’ll tell others how “cool” it is.

Here’s the point, if you can’t be as committed as Amazon, Best Buy, Toys R Us, and the big boxes to deliver a seamless experience, then don’t tip-toe around it.  Heck, even Sears which is dying as a retail bricks and mortar store, is committed to capturing online biz with their new iPhone apps as well as their marketplace site , then put your money elsewhere.

Oh and one more thing: many of these big guys are selling merch online at a LOSS to build fans.  Take a look at January’s price for Sarah Palin’s Going Rogue.  List price was $28, Amazon had it for $9.98. That’s probably $5 below what the average small bookstore would pay for it exclusive of shipping.

Just how much profit would you have to make to recover the loss you would incur if you matched Amazon’s price?  Since a great independent business only keeps about 3 cents out of every dollar, one book at that price could take $150 in profitable sales to make up for that one discount.

Its those kind of decisions you have to be able to make in your bricks and mortar and online store.  I cover more of the financials in my new book.

The easy money online has passed.  If you want to have an online store presence, you need to invest the money to be at least as good as the big boys.  Just like an independent coffeehouse has to be at least as clean as the local Starbucks with a speed of service no slower, with a product at least as fresh, you have to meet the competition’s standards just to be in the game.

Don’t pay attention to these harsh web realities of 2010 and you’ll continue to discount your goods online, upsetting your in-store customers, robbing your store of cash flow and losing focus to what really can move profits – your interactions with customers on your sales floor.

If you can commit to making your site vibrant, not just a discount place but also offering unedited reviews of your products, number of items in stock and online chat – have at it! A better use of your money is to make your website a draw to customers, then give them a reason to come into your store so you can standout, sell more and develop a relationship built on something other than low price.

What say you?