Tuesday, 4 January 2011

We are the consumers, we have a voice

I don’t often write opinion pieces on this blog, not because I don’t have them, but because often I like to keep this space a neutral ground for my readers. Even as I press "publish post" I feel a bit nervous that I am putting my opinions out there in the blogosphere for people to read and criticise.

But there is one issue that is starting to make my blood boil. Larger Australian retailers who are calling for a GST tax to be imposed on internet purchases. See The Age articles here and here. The crux of it is that any items below $1,000 purchased online and overseas are not being hit with GST payments on their way into Australia. The bricks and mortar "large" retailers are crying foul saying that they want a "level playing field".

For many years these large retailers have made ridiculous profits on fully priced items bought through their stores. Over the decades these same larger retailers who are talking about level playing fields have turned away from Australian Manufacturers in favour of cheap asian imports often seeing quality brands replaced with cheaper products.

Every year in Australia there are the Stocktake "sales” where these larger retailers flood the market space with inferior cut price products in the name of a quick sale (I know, I worked in one for several years and 400% markup was not unusual). These larger retailers have taught and trained the public to wait for “the sales” and now when the going is a bit tough for some of them, they are crying for a supposed level playing field. These are the same larger retailers that have made their profits from undercutting smaller "main street" retail businesses.

So let’s take a look at some of the actual "larger retailers" that are complaining:

Harvey Norman. This retailer is well known for selling electronic goods, at a cheap price. Most people who shop at Harvey Norman do so when they have a sale and when they have “interest free” promotions. This store has taught and trained the public to wait for the cut price sales and interest free promotions that lock people into purchasing things that they can’t financially afford. Customer service is non-existent within their warehouse environment, the only reason people put up with the lack of customer service is because the goods are cheap or on interest free. Gerry Harvey, the owner has been very outspoken about this issue.

Myer. Once the bastion of customer service, is now a bit of joke. I went to Myer Northland Menswear to purchase a robe for my husband for Christmas. The service attendant there didn’t even bother to smile to me and when the register that I was standing at wasn’t working, he dragged the robe along the floor to the next register where he then took my money, rolled up the robe and threw it into a bag with the receipt. If I had purchased this online, it probably would have come nicely folded and pressed, with a nice “thank-you” card. Needless to say, I didn’t do any of my remaining Christmas shopping in Myer and probably won’t shop there again. During my University years I worked at Myer as a sales attendant and watched it disintegrate into the soulless retail experience it is now.

David Jones. I am surprised that David Jones is on this list. I always find the shopping experience in David Jones enjoyable and fruitful. Customer service and products at David Jones are always top notch and I am always happy to pay full price if I know I am going to be treated respectfully. I suspect David Jones have added themselves to the list because Myer is on the list.

Target. Target is the sort of store that advertises value and you really can’t go past Target for good value clothing and products. Target doesn’t really do “customer service” like the big department stores, except at the cash register and returns desk. The registers at most of their stores have been converted to a “cattle like” check out experience where customers line up for 5-10 minutes before being served. You know what retail environment you are walking into when you walk into a Target or Kmart.

Borders. I think that the worst thing that Borders could have done was integrate Gloria Jeans into their stores. I will not buy books that are dog-eared or have coffee spilt on them. If I can’t find the book anywhere except Borders, and they are asking full price for something that is damaged I still won’t buy it. But I like the tactile book buying experience and the layout of their new stores with accessories that support the book buying experience is inviting and engaging. They have taken a look at what their point of difference is and they are working on it. We spent a lot of money on books in our household, and it tends to be at Borders or Readings.

Our family spends a lot of money on products from local stores in Melbourne that provide stock that is unusual, different and they deliver a point of difference; great customer service, great layout, shop assistants that remember names and engage us in conversations. We are happy to pay premium prices for products of a high quality if we are treated as a premium customer that is valued. Retail stores that are struggling can’t just blame online shoppers for their woes. Watch a few episodes of “Mary Queen of Shops” and you will realise that customers want more than just the product, they want to be engaged in the experience and the retailers have to "train the shopper" to want this the same way that they have "trained the shopper" to wait for their stocktake sales.

As a patchworker, I buy fabric online. Sometimes the price difference between local and online is considerable. But I also make a point to buy from our local patchwork shops, especially those ones that make an effort to know me and engage me as a customer. The better "bricks and mortar" shops offer demonstrations, VIP nights and support craft groups in a way that online retailers just can't.

I would encourage all of you who feel passionately about this issue, to seek out the customer feedback forms on the "big retailers" web sites and tell them why you would rather purchase online than in their stores (if that is the case of course). Say it loud, blog about it and then send them the link. And tell Bill Shorten what your opinions are as well. The "larger retailers" are going to be spending big on advertising in all media's about this issue, our voices have to be heard.

We are the consumers, we have a voice.


Anonymous said...

It's also relevant that prior to these enormous cookie cutter stores (there's one in every town, exactly the same as the last town) we had small independent retailers. They are all forgetting that what is now happening to the shopping dollar due to the internet is what happened to independent retailers due to these large retailers. It seems like retail evolution and perhaps karma...

Kis said...

I whole heartedly agree with this.

The retailers should be looking at this as an opportunity to change their service structure or product offering (or prices?!?) to gain back the trust of the public who are going past them for better products and better pricing elsewhere.

Sadly protesting is the only way which these big retailers can complain about online transactions. If it was a small retailer who was doing something similar to them, they'd likely just push that company out of market in the same way which many have been lost before.

http://lissyli.blogspot.com/ said...

Awesome post. I totally agree. My husband and I watched Gerry Harvey bleating on TV about this issue. What about all the years they have been ripping us all off. He is just greedy!
PS, don't worry if people don't agree with you, it is your opinion and you are aloud to have it!

Anonymous said...

Today we chose to buy our new TV from a store rather than online, even though it was a bit more expensive...we did so as the sales guy was great, gave us lots of his time and advice and clarified their after sales service. Coincidentally, it was David Jones.

From the article you linked to: "the fact that offshore retailers aren't required to levy duty or GST on purchases under $1000 creates an enormous competitive advantage for foreign businesses selling into Australia."

They need to get some perspective, surely? How can they say 'enormous' when it's only 10%? If i buy something for $100, i may be saving myself $10 worth of gst, but i'm probably paying more than that in postage. If local stores gave better service (better staff knowledge in their products would be a start!) and more competitive prices, i've always choose to buy local rather than risk online credit transactions and the whims of overseas mail carriers.

Anonymous said...

Hear, hear!

This latest campaign is almost as sickening to me as Dymocks's effort to allow the parallel importation of books (and ruin our publishing industry in the process).

I will cross town to support small businesses like the Sun Bookshop in Yarraville rather than monsters like Dymocks or Harvey Norman. Yes, I also buy books online, particularly knitting books that aren't available in local bookshops. Sometimes I do both: I took up the great offer at Readings to buy both of Pip Lincolne's books for a special price through its online shop.

I'm happy to support local small businesses - both online and physical shops - but these huge retailers have nothing to offer me.

Alison said...

I agree with what you have said. i will return to a shop for the customer service time and time again, and when i find a good store I stick with it! I like my local butcher and greengrocer and they are a 10 minute drive apart, but I go there in preference to the supermarkets for a reason. I haven't shopped in Myers in years. They simply don't have the range anymore that they used to - to save money they only stock what they sell the most of now, and now they wonder why their sales are dropping ... um, because I can't get what I want from your store so I'm not going there to buy anythign else either. And yes, their service has completely gone down the toilet, it started to sour for me when they got rid of the professional bra fitters in the ladies department as part of their cost cutting.
Yep, bring back service. SERVICE!!! I thought the commentary from Choice that the big stores crying poor was a crock was very interesting.

chocolatetrudi said...

There's something a bit odd going on with booksellers in Australia at the moment. A&R (and Borders, which they own) has upped their prices to 15% or so above RRP. They've also narrowed their marketing to highly discounted titles. Both publishing bods and independent booksellers have mentioned this to me, but nobody is entirely sure what they're up to.

I'd like to support bricks and mortar stores more often, but they don't stock the sorts of books I buy. I might have to wait longer to get them from Fishpond, but at least they're available and quick to find.

Anonymous said...


They just don't understand that SERVICE can often be more important than price. Myer is a good example - if they didn't cut costs by having so few staff around, they wouldn't have driven so many people away. I generally buy bras there as they have decent fitters (unlike Bras 'n Things), but it's now a slow and painful process to get that service.
- Katharine

Optix said...

With Myer, it's a vicious cycle. The cut staff to lower costs, which degrades service, which loses customers, so they cut staff to lower costs, etc...

Perhaps if the CEO and Board didn't expect such high wages, and shareholders such high dividends, they could put cash back into what makes them money in the first place. Instead, they want to pull a RIAA and blame the internet.