Dumb Policy: Store Charges $5 Just To Look At Goods, To Keep People From Looking And Then Buying Online
from the add-value,-don't-take-it-away dept
It's really incredible how many bad strategies legacy companies come up with in trying to compete with the internet. Rather than increasing their own value and figuring out ways to leverage that value, they often go in the other direction and make the experience worse. Case in point, this store in Australia that is so fed up with people shopping in the store, but then buying online that it's now charging people $5 as they enter just to look around. If you buy something, the $5 counts towards the purchase. If you don't, the store keeps it.
As of the first of February, this store will be charging people a $5 fee per person for “just looking.”This story originally got attention via Reddit, and looking at some other photos it appears the store is called Celiac Supplies, and is a "gluten free grocery store."
The $5 fee will be deducted when goods are purchased.
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 line with many other clothing, shoe and electronic stores who are also facing the same issue.
I can understand where the thought process to do something like this comes from. For years, of course, we've heard things about how Best Buy has basically become Amazon's showroom. But this is the exact wrong response. Rather than showing ways to add more value to the customer experience so they want to come in, they're taking away value and giving customers reasons to never go in in the first place. That's a stunningly short-sighted way of running a business. The people who were coming in, seeing what was there and then ordering online aren't suddenly going to start paying you for stuff anyway. They'll keep shopping online. But, on top of that, some existing customers who are used to buying will be turned off by this and also switch to buying online.
In fact, this seems to be screaming out "hey, you get better deals online and we know it!" Not smart.
Instead of doing that, why not look for ways to add value? For a specialist store like this, they could create all sorts of additional value, including more support in helping customers find what they need, the ability to offer bundles and recipes, cooking classes and much much more. The focus should be on using the local store to provide more value rather than taking away reasons to shop there.
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Filed Under: customers, online, providing value, retail, shopping, showrooming, windowshopping
Reader Comments
The First Word
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Dumbest Business Decision of 2013
I'm wondering just how common this practice is. It has to be one of the worst business idea I have ever heard, it seems unlikely that many businesses would be that stupid to do it.
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Oh, good
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http://www.techdirt.com/articles/20111214/06322517083/local-bookstores-call-boycott-am azon-advertising-their-prices.shtml#c1087
I didn't actually think there'd be stores insane enough to do it.
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and Australia complains about software price gouging?
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WTF
Who goes into a grocery store to window shop for a later purchase online??????
Ok, I have done grocery shopping online in order to AVOID going to the grocery store, but I have never gone into a grocery store to see what deals I can find online. I would have to say that 99% of the times I have entered a grocery store, it was with intent to purchase.
People need food to live. It's not the same as clothing or electronics. So I would have to say they are just using that example as a quick cash grab that will most likely lose more customers than it attracts.
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Re: Dumbest Business Decision of 2013
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"Sorry, come back next week and thanks for the five bucks, sucker"?
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Re:
But that shifts the focus back to where it belongs: adding value. It's tough to compete on price alone... you'd better be offering something the bulk retailer can't easily offer.
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Re: WTF
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Re: Re: Dumbest Business Decision of 2013
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Why has this come about? Because we are desperate!
There has been high volume of people who use this store as a reference and then purchase goods elsewhere, a practice commonly known as "shopping around for the best price". These people are unaware our prices are almost the same as the other physical box stores like ours (ie. relics of the past), plus we have products simply not available anywhere else that are so special people will gladly pay five bucks for the esteemed honor of gazing upon them.
This policy is line with many other clothing, shoe and electronic stores who are also facing the same issue. The issue being that the Internet has made us obsolete with better prices and the convenience of not even having to leave one's house. We're eager to go out of business, and you can aid us in that endeavor by shopping online like smart people.
At least they don't charge $5 for visiting a website.
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Re: Dumbest Business Decision of 2013
The only way I can see this actually working is if you gave customers a voucher to get something from the store's website to promote brand loyalty - otherwise it'll just drive people away from casual browsing, and even those people who know what they want. Also, is this per head or per family - that would also have an effect.
Way to cut out all those poor-but-tech-hungry teenagers & students though!
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ACTUALLY, this may work.
But a furniture store is a stretch.
However, on same line, look who's thinking of putting up a paywall!
http://adage.com/article/digital/youtube-set-introduce-paid-subscriptions-spring/239437/
If happens, may undermine your "free as paid by advertising" notions some more, huh?
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Well, not yet anyways, but now that you brought it up.......
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What she basically said was, she was sick of people coming in and getting her consultation for an extended period, then leaving and buying the products online. I can see where she is coming from, and sometimes no matter how much value you add to the experience, people will try and avoid paying for anything.
Perhaps she should set herself up as a "gluten free food" consultant and charge per consultation, as that's essentially what she said in the interview. She was acting as a dietician, who charge significantly more than $5/15 minutes, to then have the person leave without buying anything.
Anyway, I think everyone is being caught up in the headline being presenting, without delving deeper into the specifics, which seemed reasonable to me.
Reading techdirt for 5 years, first post :)
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She also stated that this "fee" would not be charged to people that just came in and looked, not engaged a sales staff in a lengthy discussion.
I still think its not the best approach to building a happy and loyal customer base, but it's not the hysterically bad idea the media reported it to be.
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This response is simply an insult to people who are trying to be smart shoppers.
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tit for tat
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Surely a far more effective solution
They may not be able to match the prices, but if the stock there in front of the customer and they can walk out with it now, they'll probably accept an extra 50c.
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Re: Surely a far more effective solution
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Bankruptcy articles
Then they will charge $20 for every person who reads an article about its impending bankruptcy without walking past the store (in addition to the above charges).
Then they will charge $40 for every person who reads an article about its bankruptcy and did not call them to provide some support against impending bankruptcy (in addition to the above charges).
Then they will charge $80 for every person who did not attend the going-out-of-business sale (in addition to the above charges).
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Re: WTF
The closest thing I've done to ordering food on line has been Sam's Club Click-&-Pull and an order of Olga Bread (it was cheaper buying a case direct than driving 30 miles to the nearest market selling it).
Good point about the grocery stores and intent to purchase. I personally don't think anybody really wants to go there.
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Comparative solution?
I am curious as to your suggestion. While I do not live in Brisbane, similar stores where I live price their products based on the added cost of the advice that they provide i.e., paying someone to help you with your decision.
I personally work for a retailer whose business strategy is built around the principle that people are prepared to pay for the service, but by my five year experience, only 1 in 10 at best people pay for it (the company finds that this is more like 1 in 25 but service varies from person to person).
Your suggestion is that the retailer competes by spending more money on added value, but you imply that they should do so without raising prices. I have dealt with countless people who spend time (and by time, I mean 30-60 minutes at AWARD (acronym) rates plus overheads) with me to determine what meets their needs only to walk out of the store. Then they go and buy it elsewhere.
I do not have an issue with genuine people people who seek a better OVERALL deal, i.e., people who value the service, but I detest those who treat retailers as a try before you buy online doormat. I have personally dealt with a number of people who waste my time, buy online, then come back to me for help with their product! Worse are the few occasions where people expect me to fix their products that they didn't purchase from me!
My employer has records that exemplify people who have wasted, on a significant number of occasions, hours of staff's time costing the company hundreds of dollars, and in some cases, thousands of dollars. This has gotten to the point where we have had to ask certain people to leave the store and not return.
So again I ask, how do you add value without increasing cost? Or more simply, how do you deter people who have no intention of making a purchase from engaging with staff members?
PS I was under the impression that companies like B&H Photo Video charge people to look at merchandise - how is this different, and has this been unsuccessful?
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If people are unaware that your prices are almost the same as other stores or that you carry products not available elsewhere then in typing up the notice you should have realized that you are identifying failures of yours and in your business.
Attempting to charge, potential customers for your own failures in informing people of your selling points is bizarre in the extreme. A sign like that will discourage people from entering your store and that is pretty much the exact opposite of what any store owner should be attempting to do.
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Re: ACTUALLY, this may work.
In other words, you basically agree with Mike - where extra value is given then the fee might be justified or even desirable. Where nothing is given, it's pointless and almost sure to damage the company rather than help it.
The rest of your comment, sadly, is condescending bullshit with only a hint of truth. That's par for the course for you, but you almost had a point put across in a manner ready for adult discussion rather than an insulting load of crap so you can troll another thread. Pity. Although it is telling that in the part of your comment where you weren't being an obnoxious ass, you actually agree with the major point of the article.
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That's funny, folks have had this ability for decades. And they didn't have to pay some silly fee for the privilege of doing so.
This fee isn't a new business model. This is a "help me go out of business fee". Seeing that sign, most folks would see it for the arrogance that it is and would turn and walk the other way and visit a different store that actually values their customers -- yes even the ones who don't always purchase something.
Stores that want to engage in this practice do so at their own peril. I simply will not shop at establishments that do this. Guaranteed that I will take my $5 elsewhere.
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Mike "hypes" new business models that are doing something new/interesting and have a future. This fits neither criteria.
"People want to see, touch, and try out things before they buy"
I've done this my entire life, and I've never been charged for it before deciding to purchase. In fact, some stores actively encouraged me to take free samples or discounts in order to attract my business. What's changed?
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Re: Oh, good
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Re: ACTUALLY, this may work.
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Re: Comparative solution?
The huge advantage B&M stores have over online is physical presence of the merchandise, plus knowledgeable sales people. I'd pay for that. Giving that away and hoping people will buy stuff is dumb. I totally disagree with Mike on this one.
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I used to leave near this store
Thought I might share since I actually use to live a few blocks away from this store. The store itself is in the middle of suburbia so there is no reason to go to the store unless you want to go to this specific store. You would not just go there and look around. You would not EVEN find it unless you were actively looking for it. So I can understand her frustration when people would have had to:
1. Look it up online or in the telephone book.
2. Drive to the store (for most people at 15+ minute drive).
3. Come in, ask questions and get high quality service.
It's not like anyone is just looking around to see what the store is like or if they have something in stock.
She has also imported a number of products that most stores do not stock.
That being said it is a 5 minute drive from 2 large grocery stores and they offer some of the gluten free products but not the same range as this store. For people that cannot eat glutton this store is great but you would still need to go to the grocery store to buy the rest of your food.
As for buying food online it would not be a big issue for her since customs and shipping fees would making buying food from overseas too expensive. Also there are not many stores that sell food online in Australia.
There are other stores that have sections for gluten free (health stores) but nowhere near as big as her selection. That being said I never shopped there since I am not a coeliac and when my auntie comes over that is a coeliac we generally cook meat, vegetables and macraoons which she can eat.
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Stores used to have knowledgeable sales people. Now they have nothing but slightly over minimum wage drones that dont know or care to know the products at all. They care more about selling as many warranties as possible then customer service.
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How to deal with this.
Step 2: Take out internet connected device.
Step 3: Shop.
Step 4: Go inside store, show dummy the reciept of your purchase, explain that the stpuid $5 charge just cost you $x in sales.
Step 5: Repeat as necessary until idiot realizes this is stupid and/or closes business.
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Re: Dumbest Business Decision of 2013
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I guess she solved that problem.
Now they go online and then to Cole's or Woolworth's.
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She absolutely do what you said.
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T-Shrit Wrap counter agreement
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They know they're a library where "checking out" a book means "go to the check out and pay."
I really should go buy a magazine or something... I'd like bookstores, even huge corporate ones, to stick around.
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Increase that revenue!
People are taking their time to drive to another store because there is enough incentive to not purchase from her.
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Sounds to me her primary answer should simply be to add value AND advertise that they will price match any other store. Shouldn't be hard to do if their prices are "almost the same."
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Re: WTF
As far as FOOD goes, if anything I would look for any "advice" online and then perhaps buy something locally.
This speciality vendor should have all of the things that the big chains don't. If this speciality vendor can't offer that then they have no reason for existing.
You gotta offer something. Free advice probably isn't good enough.
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Re: How to deal with this.
Step 7: Continue blasting your leg after your foot has sufficiently been shot off.
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Exactly. I am also highly skeptical of her facts: how did she come to the conclusion that so many of her customers did this? Did she actually distribute a questionnaire and take a survey, or is this just a baseless assumption?
In any event it blows my mind to imagine ordinary people actually paying that fee. I know I wouldn't.
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Re: Re: WTF
Indeed, getting advise from a salesman at a local store is probably the _last_ thing I would do since they are the most likely to try misleading me. Normally I do my research online before going to the store, then if the salesman completely disagrees with the info I got online I _may_ go back to the internet to study that difference before making my final decision.
Perhaps it is simply that we are so much more intelligent then her customers that we make them look like drooling idiots. Or maybe that's just her opinion of them, though I have to wonder considering she is apparently not the only one doing this. I'm glad I'm not an Australian because I'd be terribly embarrassed for any remaining customers these stores have.
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Re: Re: WTF
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Re: ACTUALLY, this may work.
That 'no question' return policy was directly responsible for many purchases I have made there of items which I had not researched. Simply knowing that I will face no issues returning it makes impulse spending very easy.
And even there I check my overall return against the membership fee every couple of years to make sure it is still worth while.
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reaching goals
I would want people to come in, even if they're only customers one out of three times.
because the more they are used to walking into your store, the more likely they are to buy something, or several somethings, that they might not have bought if they were not in the store.
I get the whole, 'quit using me' attitude,
but as a business, I'd want people referring to me as often as possible, building a relationship, and increasing the odds they do business with me.
otherwise it's like saying "you can browse my website if you promise to buy something worth at least $10. pay now, before we allow you to browse, because we put a lot of good information on our site, and we don't want you reading our reviews and then going elsewhere."
just seems like although some people would pay (yeah, I know, I know :-P ) the overall traffic would go into a downward spiral. there would be less cross selling and spur of the moment purchasing.
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Re: Comparative solution?
I recently did a shop around for a new blender at a couple of local retailers (one being a Harvey Norman store). I managed to get a price at Harvey Norman for what I wanted at a discount (still knowing they could go further) without doing the actual purchase.
I came home and discussed with my wife what she would like, took her back to the store and we made the purchase from the specific sales staff I first spoke to. There were other staff available but I don't like some of them, as they never smile and always look they have been sucking on real sour lemons all day. I could have made an even better deal online but in reality, I prefer to shop locally where I can for the convenience and the service.
Even at our local Woolworths, I will only use the self serve checkout area only when there are long queues for the human manned checkouts. I like the interaction. In some respects this is strange since I have been programming computer systems for over thirty years.
The upshot is that people will purchase if all the boxes are ticked and those boxes are as individual as the person. If you are a retailer you have to understand this to be successful.
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Times are changing faster than expected.
That shop owner just made sure it will not get any new customers(genes) and most likely annoy the loyal ones enough back to the supermarkets. Forever. I wonder how the owner plans to measure the cost/benefit of that or is he just going to roll with empty conjectures.
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So why doesn't she just charge for her advice then?
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Re: reaching goals
but like most Aussie websites it is a price free zone (yes there are general price points on this website) and they expect you to come in to find out their prices and I suppose grab a sale. Some of the excuses companies large and small use when you query this colonial policy defy belief especially when many overseas websites are quite happy to show their prices.
Even stranger is that despite a web presence they don't appear to do online sales, or if they do it is very well hidden. I say this because one of my favourite small specialist stores is into some of these products and does manage to sell online bulky goods throughout Australia without whining about it. In fact they have rather good sales online and it helps to keep their B&M store open.
I find in this instance a small specialty store which charges customers to enter their store a surefire recipe to piss off potential customers and to ultimately shut their doors for good. As someone else said, this sign states that they haven't done enough effective marketing to their potential customers on the good points of using their services.
Living thousands of km's away I have never been in the store, but maybe their customer service and attitude isn't what one would expect from a small specialty store.
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I agree with her approach and wish her luck. If you do not need their advice, you will not be charged. If you need advice, but think their advice is not worth the $5, you probably were going to shop elsewhere anyway as price is more important to you.
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Re: Re: WTF
And both promotional ideas make more sense than Mike's one-size-fits-all value mantra.
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Good point brought up thumbup
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It basically states that as a customer has purchased goods without being able to inspect them, they are guaranteed a period of 7 days to return the goods for whatever reason.
There are a few exemptions, but on the whole it's a very good arrangement and has likely contributed to the UK's massive adoption of online services.
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Good way
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Re: Re: Comparative solution?
I am glad to hear you had a good experience (no, I do not work for Harvey Norman), and that you sought the staff member out - since their ongoing employment requires them to meet sales targets, it's all too easy for a returning customer to be snapped up by a different staff member.
But customers like yourself are few and far between and because of the nine other people who wasted the staff member's time, the price you paid was raised to compensate for this added cost.
The question is - would you be prepared to pay even more money when an even smaller percentage of people actually make a purchase?
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what about the insurance industry ?
what about your local golf club? you pay a yearly fee, as well you pay for the specific times you use the facilities. If you don't pay the fee you don't get to go there and pay a fee to play !
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Though I would be very very careful about this as 'experts' can easily turn into 'salesmen' simply selling what is most profitable to the store and not what is solely in the best interest of the customer.
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Personally I don't think the public is ready for a cover charge for window shopping. It's a little too blunt. And kind of hilarious. But if she succeeds, it's not a ripoff, just a price.
Now if you walk into a shop on Bahnhofstrasse, THAT's a ripoff.
You can subscribe to the Telegraph (new paywall just a few days ago) for 1.99 a month. Is 1.99 too high? Could be. It's the Telegraph, after all. But there's a price in there SOMEwhere.
And watching these new, new crazy low prices get battled out is a whole lot of fun. That's why I love Techdirt.
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Curiously, at McDonald's in Switzerland, there is actually a small charge for one of those little packages of ketchup (as I recall it is about 30 cents).
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Re: Re: Re: Surely a far more effective solution
I've worked in a store were we were in the business of giving out trustworthy and expert information as an essential part of what people came there for. When I mention something about prices being lower elsewhere, my boss just said, let them go there then. It was a very successful business, with very strong customer loyalty.
The problem of people going elsewhere is age old. It would appear that the "value added" part of this store under discussion, is not valued by some of its current "customers". Perhaps if the staff were to practice up on treating visitors well and being nice to them, they would be more successful. They might even be able to increase their prices substantially to pay for the extra value. Trying to compete on price is often a mistake. In fact it can encourage the wrong kind of customers - those that don't appreciate the value of what you are selling. Forget them. They're wasting your time, and you're wasting theirs. Just put up the prices to be fair for what you're really selling, and the "deadbeats" will go away.
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oh, i'm *really* hatin' on these linky/ad-like things at the bottom of the screen that i can't really see, anyways...
in fact, as a matter of principle, i HATE all that crap...
it is just like stupid tee vee, where they have so many stupid fucking annoying ADS for their stupid shows overlaid their current stupid show i am stupidly trying to watch...
its gotten so you've got the channel's stupid bug in one corner, another stupid bug for the affiliate, then a HUGE animated banner overlaying 1/4 to 1/3 the screen WHILE THEIR OWN STUPID FUCKING SHOW IS ON THAT I NOW CAN'T SEE OR AM SO DISTRACTED I GET PISSED OFF AND CHANGE THE CHANNEL EVEN IF I WANTED TO STUPIDLY WATCH THAT STUPID SHOW...
fuckers
we get shit on for stupid stuff WE PAY FOR; forget about piracy, etc: we get FUCKED OVER FOR LEGAL, PAID-FOR content, and despise Big Media for THAT alone...
fuckers
art guerrilla
aka ann archy
eof
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PELICAN CASES
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Option A: Pay more money for item #1
Option B: Pay less money for item #1 save on gas, time, and stress, get to do it in your underwear (without getting weird looks from people)
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The Last Word
“I used to leave near this store
Hi everyone,Thought I might share since I actually use to live a few blocks away from this store. The store itself is in the middle of suburbia so there is no reason to go to the store unless you want to go to this specific store. You would not just go there and look around. You would not EVEN find it unless you were actively looking for it. So I can understand her frustration when people would have had to:
1. Look it up online or in the telephone book.
2. Drive to the store (for most people at 15+ minute drive).
3. Come in, ask questions and get high quality service.
It's not like anyone is just looking around to see what the store is like or if they have something in stock.
She has also imported a number of products that most stores do not stock.
That being said it is a 5 minute drive from 2 large grocery stores and they offer some of the gluten free products but not the same range as this store. For people that cannot eat glutton this store is great but you would still need to go to the grocery store to buy the rest of your food.
As for buying food online it would not be a big issue for her since customs and shipping fees would making buying food from overseas too expensive. Also there are not many stores that sell food online in Australia.
There are other stores that have sections for gluten free (health stores) but nowhere near as big as her selection. That being said I never shopped there since I am not a coeliac and when my auntie comes over that is a coeliac we generally cook meat, vegetables and macraoons which she can eat.