Tuesday, December 7, 2010

Service Should Be The Selling Point

With Christmas fast approaching it has been suggested that more Australians than ever before might be tempted to do their shopping on line. There’s a number of reasons why people would do so, including the buoyant Australian dollar trading close enough to one for one with the once mighty US buck, the relative ease of shopping from your own lounge room, and the increasing confidence people have with on-line transactions as they become a common feature of modern life. E-bay has become a household name, and for some people a way of life, and off shore retailers are making the most of the opportunities presented by cyberspace. And while there are bargains to be had, customer numbers will no doubt continue to grow.

It’s no wonder then that local retailers are starting to become disgruntled. The big stores, represented by the Australian National Retailers Association, are campaigning for shoppers to keep their dollars here in Australia, ringing Australian cash registers, and supporting Australian jobs. Many retailers are also calling upon the government to find a way to impose the GST on internet purchases so that the traditional retailers are not disadvantaged. Some of them, such as Bernie Brookes at Myer and Gerry Harvey at Harvey Norman, have proposed to set up their own off-shore operations at the expense of their own stores in order to compete.

But, is online shopping really a threat to our big retailers, or is there something else going on? While the tax issue might give the off shore operators some slight advantage, surely you would have to think that postage or freight costs would offset that benefit. While there is something attractive about shopping from the comfort of your own home, it can also be an inconvenience when you cannot actually hold an item in your hands or try on a piece of clothing before making a decision to purchase. And then there is the time spent waiting for delivery as opposed to the instant satisfaction of taking the item at the point of sale the moment you hand over your cash. And of course, if there is a problem with the item, it can be difficult to return, and even more difficult to demand a refund, when you have bought it on-line from the other side of the world.

Keeping all this in mind, is it possible that our local retailers have missed the point? Could it be that they should really be asking themselves about their standards of customer service and their price competitiveness? I have been to one of the big electrical stores with a warrantee problem and they were no help at all, sending me away to deal direct with the manufacturer. I was literally no better off than I would have been if I had bought the item on-line. I have purchased a watch on-line from Florida and paid $220 Australian dollars for a well known brand name item which would have cost me $695 or more at the big department stores here in Australia. That’s not a price difference that can be blamed on the GST, and it means that Australian Retailers need to lift their game.

Regardless of anything else, on-line shopping isn’t going to go away. Traditional retailers are going to have to find a way to co-exist successfully. That means playing to their strengths and using the advantages that they clearly have over their competitors. It’s time that the big retailers remembered that their physical presence in the marketplace is actually a competitive advantage, not a liability, because it gives them the ability to deliver vastly superior service. Once they realise that, and start to make customers feel welcome again, I’m certain that they will find a way to survive, and perhaps even to thrive.

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