Phone-Wielding Shoppers Strike Fear Into Retailers
online.wsj.com
online.wsj.com
In the case of huge stores like BestBuy that are basically like a warehouse with pretty much no customer service except at the checkout I would have no problem buying from the cheapest alternative provider (Amazon/ebay/whatever).
Some stores are for when you know exactly what you want and just want the most convenience and the best price, others are for actually shopping: investigating your options and deciding what works best for you. Helping you shop costs money. It's immoral to steal the stores time discussing what to buy then buy it from Amazon because it's cheaper.
I had a sad vision of the future while reading the article, one in which business no longer involves human interaction of any kind. Instead, we're all just browsing virtual stores, ordering items that will be packaged and shipped to us by people and robots working in factories. There will be no more traditional sales or customer assistance jobs. Some may consider this an improvement, but I don't.
When I want advice, I'll seek it out from people who don't have huge conflicts of interest around what I do or don't choose to buy.
The future is now, so to speak. Sure, there are still knowledgeable people in mom-and-pop brick-and-mortar stores, but most people already choose to shop at big box stores. I don't trust the salespeople at those big box stores to be knowledgeable and unbiased, and I doubt other shoppers do either.
Discerning shoppers already research their choices on the web before (maybe) looking to buy something at a local store. This is not necessarily a bad thing. Sure, you are no longer interacting with a salesperson at your local store. However, this is expensive -- a fact you pay for through higher prices -- in comparison to getting a recommendation from someone you trust, be that a blogger or someone you know from physical interaction (who may have gotten their recommendation from a blogger). Reading a blogger's review or roundup is not a physical interaction, but it's still a human interaction.
This may be against your own personal morals but it isn't a crime to waste other people's time.
If the store provides you a valuable service, like allowing you to try on shoes or giving you significant advice on which product to buy, you should buy the product from them so that they get profits with which to cover the cost of providing that service.
Now, it depends how extensively you used their resources and how much of a markup they want. If you were in the store for something else and all you did is wander around to try to get ideas of what else you wanted, I don't think there's much obligation to buy. But if you're spending 15 minutes talking to a salesman about all of the possibilities (especially if you wanted to ask him the questions, as opposed to him seeing you in the area and approaching you to try to close the sale and upsell you) or extensively trying out the demo units, the store is providing you value and you're using resources that cost them money. As long as the additional markup that the store wants is fair (for an example of unfair markup see the guy who chose not to buy a $40 DVI-HDMI cable that costs <$3 on monoprice), you should compensate them for the value they provided you and buy from them.
I'd like to stay focused here on the so-called immorality. kgermino's choice of words to "steal the stores time" implies theft. I'm not sure if I see eye to eye with this description.
[edit: I'm curious to know why i'm being downvoted here without any followup reply. nothing that I've stated is factually inaccurate - morality refers to personal values, which vary between person to person.]
Only if I can trust that the advice, time are all beneficial to me and not the store, which I can't, especially if I'm not dealing with a specialty store. More to the point, does the higher price justify the less then trustworthy advice provided?
If brick and mortar stores are only offering questionable advice and a hands on experience in exchange for the same product at a higher price then the online store with lower cost, then they have to compete with that. If they are providing real value, then they'll do fine.
The problem is, no one wants to pay for advice.
The assumption here is that this is just with online stores. Offline stores also compete as well, and not just using price, but real value-added services. If I got to store-x to learn about a product, an then end up purchasing at store-y because they provide greater value, am I doing wrong?
And just for the sake of arguing, let's consider the use of the word theft could apply because if the staff is helping you, that takes up time they could be spending on paying customers.
Here's why, the way I see it when a company hires an employee they are, as much as anything else, buying that person's time. When you think of it like this while the employee is on the clock the company owns their time. Stealing is to take something without the owners consent. The store owner consent to you using the employee's time, that is effectively the employer's time, with understanding that you are wanting to buy something at the risk of you changing your mind. This is the unspoken agreement. When you use the employee's time without any intention of buying something you are doing so outside of this unspoken agreement and that requires a different consent. If you walk in and say that you do not intend to buy something then the owner can decide whether to consent to your taking the employee's time, or then can decline.
tl;dr Stealing is taking without consent. When you talk to an employee you are taking them away from the company. Consent under false pretenses ins't consent.
If the brick and mortar store's only value-add is providing the same information I can find online by reading the online-retailers website, then why do they deserve my business? I go into brick and mortar stores to see if they can offer me something else. Sometimes this happens, and the value makes me purchase it from the local store.
> It's immoral to steal the stores time discussing what to buy then buy it from Amazon because it's cheaper.
Except, that's an incredibly small number of people purely doing this. People don't go into the store to learn what to buy and then just buy it on Amazon. They go into the store, learn what to buy, learn about what the store can offer, what Amazon can offer, and then make a decision based on the value. Or they might go onto Amazon and learn what to buy, and then go to the store and buy the item now rather than wait for it.
Stores need to adapt (as demonstrated in the article) and even mom-and-pop stores can compete in this arena. I'd say that they can compete in certain areas easier than online or big-box retailers.
Exactly, if that's all the value they add then they are basically competing on price. I am thinking of the stores that actually guide you through the process.
One example by me: a mom and pop shop that specializes in HDTV's. You go in, often are greeted by one of the owners, and they take you through everything explaining what the specs mean, what is best for you etc. This is far more information than you can find in an Amazon description. Now don't get me wrong, if you go in there and tell them that you're not planning to buy anything they will still be more than happy to help you out, that's their business model. However I would say it's immoral to go there, tell them you are going to buy a TV, work with them to figure out exactly what you need, then go on Amazon and buy it for less.
tl;dr It's not immoral to walk into a car dealership and ask for a test drive under no pretense that you plan to buy a car, but it is immoral to spend 3 hrs. with the salesman then at the last minute say that you never even considered buying a car from them. The actual line falls somewhere in between.
When I was ready to buy, I could have ordered the camera from B&H, Adorama, or one of the other big catalogs, and saved some money. And the thought certainly crossed my mind. But I decided, with some counsel from my father, that the right thing to do was pay the local shop their premium for the advice they had provided.
They're also great for adapters. I bet 10% of the people reading this have paid Apple $30 for a Mini DisplayPort to {VGA|DVI|HDMI} adapter. I got all 3 for $30-something.
Though cables can vary a bit in price depending on quality, so that might have come into it a bit too.
(for those who are unaware: basically the entire purpose of digital communications is to confer immunity to signal noise and distortion)
When we discuss things on the corporate side, most people seem to be of the opinion that the law is all that matters: if a retailer can find a tax loophole that lets them book all their profits in Bermuda, even though they actually did business in and used the resources of the United States, then well, good for them. But if a person dares waste the retailer's time, even though what the person is doing is every bit as legal as those tax games, suddenly that's a moral issue we should worry about.
If a company goes out of its way to uphold ethical standards above and beyond what the law requires, I do try to do the same when dealing with them. But for companies that only go by the letter of the law and play hardball, I don't feel I have any obligation beyond the letter of the law either.
Perhaps there's a correlation with politics? Most of the politically-charged stuff I read has a leftward rather than a rightward skew, and generally lefties are more concerned about the ethical behaviour of businesses and righties about the ethical behaviour of individuals. (Yes, I know that's a sweeping generalization. And is it just me, or is "lefties" quite a commonplace term and "righties" really weird?)
Note: Please let's not turn this into a discussion of any of the particular ethical transgressions I mentioned; the point isn't whether, e.g., oil companies are really spreading disinformation about global warming, nor whether that's a bad thing, but whether they're commonly accused of doing so by people who think it is a bad thing. My experience is that they are.
I'd question why it's okay to consume a non-local store's resources?
I'd also question the concept that people go into local stores with every intention not to purchase. People go into the store with every intention to compare products and price, but that doesn't mean the local stores loses because of the person's intention.
Circumstances surrounding items in stores change by the minute. Things like demand, how long an item has been at a store, the fact that an updated model was just released, etc. American retail stores seem bound to the retail price set in the computer even when that price has been made absurd by unfolding circumstances. It would be much better if the staff were empowered to deal than to ship unsellables off to some giant auction house to get pennies on the dollar.
Of course, that would mean creating a chain of authority in stores ending with giving minimum wage employees responsibility. Then again, if you can give them a cut for upselling those ridiculous "monster" cables, they may relish the opportunity.
My favorite haggling technique is to ask about the credit options and extended warranty.
If you're going to haggle, act like you're going to buy it on the store credit card with extended warranty.
I usually go after the "last years model" or "clearance" type items, iphone in hand to demonstrate the current retail value. The most they'll ever do is knock a few percent off and offer me a free cable or something. Their best offers are almost always still ludicrously beyond the reasonable current price. Trying for more gets us a little session at the Altar of the Wyse Terminal, followed by a shrug and "It won't let me do that". Even when the manager is involved.
I'm hoping that bargaining in retail stores will become both common, fruitful, and a socially expected norm.
Granted, it wasn't Walmart. Rather, the Dollar Store. >_<
Yet, when I buy fly fishing equipment, I almost always buy from a local store—and even the "big box" store, Orvis, offers a fantastic in-store customer experience. Why am I loyal? Because they don't try to sell me crap. They let me hang out and talk fishing. They help me find new spots and learn about new techniques. There's a huge value add, and I'm willing to pay a premium.
Big box stores put a lot of mom and pops out of business in the 90s and 2000s. Now they're getting killed by online retailers. I'm not sure who's going to take out Amazon, but I wouldn't be surprised if there's some level of resurgence when it comes to local retailers who focus on service.
Because you've made use of the facilities at Borders that make them need to charge you more -- the physical store with a stock of physical books and actual staff who can help you if you can't find something or want extra information. You've derived a tangible benefit from your use of those facilities: you've found some books that interest you, and established that some others aren't worth what they cost.
Sure, no one is then forcing you to buy the books in Borders; neither the police nor Borders staff will give you any trouble for freeloading. And it's not actually against the law. If that's all you care about, fair enough. But it's not like there are no reasons for buying things in a bookshop when you've benefited from the things they offer and Amazon doesn't.
Another reason: If you find Borders useful, then you'd probably prefer them to stay in business. You might want to help with that. Again, no one's forcing you to, and you may just not care much about the tragedy-of-the-commons effect that may ensue when you and others don't. But it's a reason.
> Borders doesn't offer enough additional value to make me feel bad about this.
You can give them some but not all of the additional value by buying some but not all of those books from Borders. For instance, the ones where the price premium compared to Amazon is smaller.
(For the avoidance of doubt, I'm not saying "Bricks-and-mortar good, online bad". I buy a lot of books on line, more than I buy in physical bookshops. Amazon offers useful services that Borders doesn't -- customer reviews, the recommendation system, and so on. If you've benefited from those, that's a reason to buy from Amazon.)
Borders is a pretty meh experience though. You'll get a much better local experience going to a place downtown with a good reputation like city lights, the tattered cover or the strand. They have a lot of reasons to support them - book readings, local authors and topics, live music, staff picks, newsletters, passionate buyers, enthusiast staff.
It's a nice place to hangout and I always buy something.
I should note, though, that the eReader devices that Borders has on display in their stores are particularly junky. I spent a little time playing around with them, and they were completely unusable for me. I don't find my Kindle particularly intuitive to use (at least until I have a book loaded up), but the devices that I played with in Borders were terrible.
Also, just like supporting locally owned business, supporting locally operated business is in your best interests. They create local jobs and contribute to the local tax base.
I know this isn't a popular opinion, but the sales tax disparity needs to go. The states get triple penalized by it - lack of tax revenue, lack of jobs and it creates a disincentive to online retailers to spread their operations. Maybe they all need to drop it entirely and raise income taxes to make it up (which isn't a bad idea, sales tax being at least somewhat regressive). If not, they need to find a way to collect it.
I have no doubt that this trend will accelerate though, I am guilty of doing it myself. Just like we didn't really realize what we had lost with local farming and the corner hardware store until they were mostly gone, we probably won't realize how much we miss local retail until there a huge portion of goods simply can't be found in person.
The difference is what the local business can charge over the online option.
Let's say 1 in 10 things you purchase you need to buy today. That means 90% of purchases should be online the way you see it. But if local stores suddenly lost 90% of their business, the prices on the 10% would have to go way up. They'd have to stop stocking a lot of items, lower inventory on the rest. Their buying power would be destroyed. The enablers of retail would dry up - distributors close, regional truckers take jobs with ups, they tear down the storefronts and put in housing.
Once you lose something it can be hard as hell to get it back. Want to buy US made textiles? Good luck. To buy local produce I am a member of a CSA - I have to pay for a year upfront, pick up my box between 4:30-6:30 friday, have no real control over what I get, if I need extra for a dinner party i'm out of luck, and I think there is a 2-3 year waiting list. The local meat and milk I buy is illegal, the regulatory environment has long moved past small producers.
Want to shop at a locally owned hardware store? Hopefully there is one still open around you. If there isn't, how do you signal that you want one? Their owners have retired, nobody is learning how to run one, the banks wouldn't lend to a new one anyway.
Online shopping is cheaper right now because it has to be. If the retail framework went away would it stay that way? It would make sense to raise your margins in an online only world. Transparency and dynamic pricing means you can always go back down if someone undercuts you. Manufacturer quality may dive as well. If you make a mis-stitched or badly sized piece of clothing it simply won't sell at retail. It will always sell online. How many people will return it? Certainly not 100%
Exclusivity is another issue. Once you don't need to support retail, you can supply 100% of your customers from just one or two websites. Manufacturers love this. Don't like the discounting? Raise their wholesale cost. Tie products, lockout competition, force sites to take your whole invetory as it rolls off the line.
Places like Apple are so vertically integrated it'd simply make sense for them to sell direct only. They'd keep the apple stores open - after all they won't be undercutting themselves. Buying a copy of OS X? No problem, just need to verify that you've registered an approved platform with us. Jailbreaker? If they know who you are you go on a lifetime ban list. Friend buys you the new phone? If we track down the udid you're using then he's banned for life too. Bet that'll make you rather unpopular.
Retailers need to rethink old marketing strategies in the age of price transparency. Loss leaders and make up items give you too much incentive to shop around. If I knew everything at a store was reliably 15%-20% over the best online price I wouldn't feel the need to pull out the phone and check prices. It's the fact that there are little +50% or +300% landmines - and once I've found one of those and will order it online instead it seems silly to buy these other lower markup items in store when i could just add them to my online order and save a bit more. Move to shelf dynamic pricing to respond to online changes quickly. If a product does 97% volume online and 3% in your store, fuck it, dump 'em and choose another or private brand it. If 50% of the people who inspect a product in your store go on to buy it online demand promotional fees from the manufacturer and use them to offset higher costs. Integrate better with the community - support local schools and charities instead of national ones, stock local/regional brands, don't fight to open somewhere you're not wanted. Make it so people want to shop at your store to show their gratitude. Tell the local stories all over your store so everyone has a reason to think twice before opting to shave a couple bucks off. Dump the shady sales tactics, flatten commissions, fire anyone caught lying, speak honestly about product shortcomings, never use ignorance to oversell. If people know they can trust your sales staff they'll go to them a lot more, and people getting real help from a salesman don't pull out their phone and order it online at the end.
That just means the stores will have to be small (which is a benefit for them, since they have a smaller number of items in their inventory).
As for starting new types for stores? That happens surprisingly often, but obviously since most consumers don't give a hoot about who owns the store they shop at, it usually doesn't work.
They need to think their business model. Merely selling a product and advice isn't working alone. People aren't going to pay for advice when they can get it for free. Especially when the people providing the advice are also trying to sell you a product.
You make a lot of good suggestions. The best part is, mom-and-pop stores are better situated to make these changes. The question is whether they will or not. My wife and I shop both online and offline. Price alone is not the only factor. Local M&P stores compete on more than just pure price online.
But when you don't go to the store _at all_ there is no way they make a sale.
That's not to say that you should be going across town to save $20 on anything. It might well not be worth the cost in time and fuel. But doing that to get a $20 item free, or a $40 item at half price, shouldn't be any more appealing than doing it to get 2% off the price of a $1000 item.
(It's a serious bug in our wetware that all the above feels so unintuitive to most of us.)
So thats why I wrote that.
Sort of like a fair but always running and on a central position. A gadget paradise of sorts. I think it would work.
That's an opportunity for retailers to do targeted marketing with deals, specialized advertising and in store games, so that they are not just competing on price but on the long term relationship and buying patterns of the customer.