Tech Crunch had an article yesterday that was so comically shocking I thought at first it had been posted by the satirical newspaper The Onion.
It tells the story of how one retailer refuses to face a huge external force for change.
Or better yet, how a small store approached the new change with a glaringly outdated strategy that reminded me of the old, hopelessly sarcastic motivational poster that read:
“The Beatings Will Continue Until Morale Improves!”
Here’s the Scoop: An Australian retail store will start charging people $5 to “just look” at products.
Charging a “service fee” to display stock and answer customer questions is their response to the customer-driven trend of comparison shopping that includes seeing and touching a potential purchase in a genuine brick and mortar retail store before buying it online.
In a previous post, I admitted being guilty of this practice.
Here is the actual text of the window sign at Celiac Supplies in Coorparoo near Brisbane:
“Why has this come about?
There has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else.
This policy is in line with many other clothing, shoe and electronic stores who are also facing the same issue.”
I haven’t noticed that trend anywhere on this side of the globe. It sounds more like resistance to a nearly inevitable change.
The owner (named Georgiana) went on to say:
“If you’re going to be asking bucketloads of questions, you’ve got to pay for the information”. “I’m spending my time … my effort. I’m not a charity.”
“I have to wake people up. Everything in life is not free.”
I almost busted a seam from laughing when I first heard this.
The owner defiantly insists that this $5 charge will have very little impact on sales – but I wouldn’t advise other retailers to follow this example.
In case you’ve missed it, a change has overtaken the average consumer. They have access to tons of information about every imaginable product directly on the web. And they can buy these things directly from their mobile phones.
And retailers have learned that they can do it while standing in their store looking at their product display.
That’s the new retail reality. Most retailers have adjusted by offering price-matching, offering free shipping on the same product from their website and dishing out free product advice as a way to build customer loyalty. …But not this retailer! They are doing the exact opposite.
– Ciliac may have a relatively captive market of consumers who will buy from their store even if they could get better deals elsewhere.
– Last I checked, Australia was a free country and it is Georgiana’s store… so she may simply have no desire to help customers who also shop the Internet.
– It’s her prerogative to avoid dispensing “free” advice – even if that practice may build the kind of loyalty that generates long-term repeat purchases. Maybe repeat business isn’t as big a deal for them as it is for most stores.
– Finally, I noticed that Ciliac has a sharp website. This made me wonder if Georgina is actually a savvy new age marketeer who’s pretending to be an angry Luddite to generate web hits. So while us geeks freak out, maybe she’s happy to swim in a ocean of free publicity?
Meanwhile Back in the 2013 World where the other 99% of retailers live… This consumer research / browsing trend could be deadly if ignored.
In our fast-moving, consumer-driven social media age, retailers know that their public reputation could drift from helpful to selfish in a matter of hours. Doubling down on an anti-customer approach to raise revenue the way this store has seems a little bit like learning to juggle by shoving three little bean bags into your pocket and picking up five chainsaws instead. There seems to be so many better ways to go about this…
So instead of offering themselves up for ridicule as a poster child for bankrupt retailers who kept their collective heads in the sand while missing this turn – I suggest that retailers embrace reality and fight for their slice of the market.
In short: sell up their strengths – instead of selling out to their fears.
Tomorrow I’ll share ten less-than-serious ways that Celiac might consider to raise revenue without charging $5 to browsing customers.
Question for Chatter:
- So what’s your opinion of the shopkeeper who charges people to browse?
- Is it better to resist the trend of giving free advice to browsers or lean into this change in consumer behavior?