It’s hard not to hear or read about Gerry Harvey and consumers talking about the downfall of the Australian retail sector and watch them speculate on the causes and how to fix it recently given the media coverage it’s currently getting.
I will agree that at the core of this is people are buying online, but what I disagree with is the reasons people buy online. Gerry Harvey would have us believe it’s all about price and that online sales don’t attract the GST, sorry Gerry that’s not it at all.
The simple fact is the retail sector gives us consumers very little reason to buy from them, seriously what do they offer us? A store like Harvey Norman wacks a minimum 30% GP on everything they sell and then some but in return what do they provide me the consumer? I have never once walked into a Harvey Norman and been in awe of the depth of knowledge of the sales staff, or made to feel important and that they were there to help… in fact I’ve been made to feel the very opposite.
So given the option of buying from Mr Harvey at an added 30% markup or online I think I will go online as at the end of the day they are both just a place to get something.
In times past when things weren’t so tight consumers where more willing to pay that extra 30% despite a fundamental lack of service or value add because they wanted it now, right now not later it was shiny and we all like shiny things and you could take it home and play with it that very day. Of course that was a luxury of good times, and now times aren’t so hot so even the well off are more conscientious about how and when they spend their hard earned so now people are willing to wait for the post to arrive to get their shiny new goods in order to less, a lot less.
The only way for the Australian retail sector to combat this is with good honest to god service and a willingness to go the extra mile and make it easier for consumers to do business with them. This means know more about the products which it sells then the consumer buying them. Far too often I am educating the person whom is supposed to be selling the goods I am interested in, or they spend an hour on the phone scrambling to find answers to a common question about the product.
So number one product knowledge is king, it makes consumers confident. Be honest, if a product is not right for the consumer’s needs say so and offer alternatives but be genuine about it that is to say don’t simply steer the consumer at another product simply because that’s what you sell be up front about your motives as consumers are like elephants ie they have long memories.
Retail is all about relationships, you treat consumers right and they will invariably treat you right if you give them a reason to. Sure today you might not get the margin you want or you might lose a sale by giving them the right feedback, but they remember this and on the next purchase and the one after that you will make it back in spades let me assure you.
Now thirdly and a bit more on topic for the title of this entry is about price and the internet. I hear retailers lament about the internet and the trouble it cause them as consumers come in to tire kick and then buy online at a cheaper price once they have pawed the retailers wares. To be honest I know this happens quite a lot and I really don’t understand why as a consumer you’d do this, people you have it back to front.
If you know you want a product or have need of a product, research it online that’s why god gave as google. Learn as much as you need to make an informed choice about what you want, and then start hunting prices. Get a median average online cost, make sure you are realistic and include freight. I always try to get pricing from Australian online retailers as well as over seas.
Now you are in a position of power, you are armed with knowledge, you have a price in mind that you should be paying it’s time to go talk to the local retailers. Often with retailers you get one bite at this so make it count be ready to do the deal, do not waste your time or theirs testing the water. You’ve done your research you know what a good buy is, you set the price you want to pay.
Here is my hard and fast rule if they will not negotiate on price just walk away, I have been known to ring their direct competitor for directions to their store in front of them as it sends the point home for them.
Don’t buy this “oh we can only price match another quote” get real, come on retailers this is the most absurd policy I have ever heard. What school of business did you go to that told you sending a consumer that’s standing in front of you wanting to do a deal to your competitor was a smart move? Hello are you insane? Given the local climate you never ever want to expose your customer to another avenue of business. Hell if I can get a better price from your competitor why would I deal with you again?
Now I will admit at this point some gamesmanship comes into play, often I will say to a salesmen mate is that the best you can do and they will go um let me see and say X and I will go hmm you know what X sounds better to me… they will give me a line about oh we can’t do it for that, that’s too cheap… next thing I say is oh well pretty sure I can get it from Fred at X store for that but since I always shop here I thought I’d buy it from you, hey I thought you wouldn’t be beaten on price. This invariably leads to them talking to their manager, who will come over and say wow that’s a great price.
This is the moment to seal the deal, you again state you want to pay X for the item, and you want to pay for it now and do the deal… fast transactions are a wonderful thing to a retailer and the smart ones know that once they have built a rapport with you that you will keep coming back so over time they will always make out better then letting you walk away.
Being willing to play the salesmen yourself will give you the result you want every time I promise, you get the price you want to pay, you get the shiny right there and then and you support your local retailer.
Be mindful though, I reward good businesses, if a retailer treats me right and provides a good level of service I am more then willing to pay a premium for it. Price is NOT everything, but in the absence of service or a value add unfortunately a good 90% of retailers reduce themselves to just that.
I am quite a loyal customer, if they do the right thing by me I will do the right thing by them, but I will never be taken for a ride… next time you feel the urge to buy something online please give your local retailer a change, even if you have to educate them a bit about this process, I promise you time and time again it’s worth it and you can create lasting relationships that mean you don’t have to go through the routine repeadly.
My last piece of advice is simple, use peoples names, read their name tag and use it… make it a human transactions not a financial one.