Australian Retail: Is online shopping really the issue?

Online Shopping

Australian Retail:  Is online shopping really the issue?

I have been an avid online shopper for years. I originally started because I had researched an item online and had then tried to order it in from a traditional retail store. 9 times out of 10 this was an extremely frustrating experience. It was just too hard for most of them to order in something they haven’t got in store or to ring their supplier to check.

I thought ‘bugger it’ and decided to put the credit card on the line and order from online. Item arrived in a week and at a price I liked. Couldn’t be happier. Then I caught the eBay bug and it has gone to researching online first, then if really time poor, check bricks and mortar retail.

Before this recent shopping spree, I tried my best to avoid malls and shops. The crowds, the attitude of some staff, the pricing. Not my thing. It became even worse after going to Canada only to discover that we are paying through the nose for just about everything. Why would I buy most of my stuff traditionally in Australia? That however is another issue.

There has been a lot of press in 2010/2011 on the somewhat negative impact of online shopping on traditional bricks and mortar retail.

I have found the debate to be fascinating as it has turned out to be highly revealing of the thinking of some of Australia’s largest companies. More so it has been more revealing of the foresight or lack there of, of some of Australia’s more prominent CEO’s.

It all blew up with Gerry Harvey’s call to introduce GST on products purchased online, under $1000 in value (like the extra 10% would bring the retailers into competition with online prices or something…) and deflated following an online explosion of critical attacks on Gerry Harvey and the group of retailers supporting the GST cause. It ended with Mr Harvey backing down and having a bit of a rethink of the campaign’s strategy, hell, he even embraced online retailing (albeit with a grumbling reluctance) launching a ‘all the rage’ daily deals site. Since then online retailing vs traditional retail is a regular feature in the Australian media.

Lately my girlfriend and I have moved in together and we have had to do a lot of shopping to get set up.

This experience has led me to have doubts that online pricing is the true issue. I believe online pricing is just the icing on the cake.

Here is a recent experience that I believe highlights a lot of issues for retailers, none of them caused by online retail.

Harvey Norman

Today was set up the apartment day. A day where we buy all the essential appliances for our new place. We needed, fridge, washer, bed, toaster, kettle, vacuum etc.

We stopped by our local The Good Guys first. We had heard they were very good, only to be standing around waiting for 20 minutes while they are chatted. Not good enough.

Next stop, Harvey Norman. To our surprise they were having a ‘once a year sale’. Beauty! In we went, all excited and confident that this would be the place.

The place was busy but not too bad.  We went straight to the fridges and they had the model on the floor that we wanted (researched online before hand). It was white instead of stainless steel, but if it saved us $300, we arent going to complain.

We still hadn’t had anyone come over yet, so decided to look at the rest of the appliances. This is when the super loud phone started ringing and didn’t stop. I was starting to get hungry and cranky so we decided to get some lunch and come back ready to do a deal.

We came back, phone still ringing loudly, but the desk was now occupied with a frustrated woman and her crying child. No one picked up the phone…

My girlfriend was over being left alone and decided to go and get some help. The guy was ok at first, nice and pleasant. When we told him what we were after and that we were looking to do a deal on all, he put a big wall up and said “we wont be reducing any sticker price sorry. What it is, is, what it is”.

“We are looking at buying over $3500 of stuff and you don’t want to work with us on that?” I said.

“Look I can throw in 8 kg’s of OMO with the washing machine…”

I don’t know what I spoke, if I did, but I remember thinking, “wow” in disgust and sheer amazement.

After this my gorgeous girlfriend had gone around with her iphone and taken pictures of all the prices ready to go off elsewhere. A salesperson apparently approached her and asked her what she was doing, she told me she replied “Getting the prices and going elsewhere since you can’t help us here” to which the person scoffed “good luck with that”.

We drove further east and hit a new home maker centre that contained another Good Guys. We’ll give them another go.

We walked in and went straight to the fridges. Unfortunately our fridge was about $150 over what it was in Harvey Norman.

Within a minute or two a pleasant, quiet sales assistant came over within a few minutes and asked if he could help us.

We told him what we were after, however this fridge that we wanted is more expensive than Harvey Norman. “How much was it?” he asked and we showed him the iphone pic. We let him know that we were looking at getting a bunch of appliances today and wanted to see what they could do. He grabbed his note pad and away we went looking at options.

He knew enough about the appliances we were looking at and didn’t push at all, only asking what we needed in each appliance and which appliance, he thought (he made that clear) would suit us best. He was straight up and honest and we appreciated that. He made us feel we had made the right choices (even if it wasn’t his suggestion) and went away to calculate what he could do. He came back with a quote much lower than we had anticipated, so much so I had to confirm he had each item. Since it was below our budget he happily added a few more little items, kettle etc.

We were just over the moon.

I asked, how many times a day he has people coming from Harvey Norman to them to better a price. “6-8 times a day he said. Happens all the time” he said.

Harvey Norman’s problem isn’t online retail. It’s them still having the impression that their price won’t be beaten and that we’d be crazy to go elsewhere, which was true decades ago. It’s their arrogance in the belief that they are still king which is killing them.

Their poor retail environment (phone ringing and attitude of their sales staff) only makes the situation worse.

My experience of traditional retail hasn’t been brilliant over the past couple of weeks and could rattle off a few more examples, as I am sure we all could.

In the end I know this, I am and always have been quite happy to shop with traditional retail, I am quite happy to pay the extra, if I get the service that is worth the price, however most of the time the shopping experience makes it extremely difficult to justify the effort and expense.

I believe retail in Australia needs to stop easily blaming ‘online retail’  and their prices, take a good hard look at themselves and the experience they give their customers.

There are plenty of businesses providing a good product, supporting it with good customer service and getting results.

What do you think are the issues for the traditional retailer today? Let me know below.