The Trials and Tribulations of Online vs. Brick and Mortar
Let me share a story that is a hundred percent truthful. However, to protect certain people and avoid any types of lawsuits, I will withhold the names of the players and companies involved. Let’s just say my friend, Bob, went into a store to purchase a high-end piece of designer furniture. The price of this piece was $4,500, but was told by the store, which had a gallery for this particular line, that this designer’s furniture was increasing in value. Bob bought the piece and expected delivery three days later.
That night Bob went online to check and see if the prices have increased in value over time. He didn’t see any significant increase but he did discover the homepage/website of the actual designer. On the designer’s website you could purchase directly from the site. There was no shipping, delivery charge, or any sales tax if you bought it online. The difference in price was over $750 less if you purchased it online. However, Bob loved doing business with this store and fell in love with his salesperson.
He called the company to verify all the prices and shared with the person in customer service what had taken place. Their suggestion was to cancel the order and buy it from them with such a significant saving. Bob, who is a retired retail executive, didn’t feel comfortable doing that and felt a loyalty to the store and to his salesperson who he loved (Bob is a sucker for a pretty face).
So he went back to the store and explained what he had done and said to the salesperson, “I don’t want you to lose this big sale, so I am giving you the opportunity to match the price.” He felt as if it was better for the store to make something on it than nothing. Well, here is where the first learning point comes in. The store was annoyed that Bob took this action and then offered that they would match the price but he had to pay the sales tax. At this point, Bob said “No thanks, cancel the order.” Then finally they begrudgedly agreed, but made Bob feel less than comfortable in his love affair with the salesperson, which came to an abrupt ending.
Instead of Bob being a hero with the store, he was treated as the customer from hell and has no intentions of ever returning there. In the future he will buy online. However, matters got even worse. Bob was traveling and happened to be shopping at an upscale mall that also carried the same designer line. The only difference was this store was having a special “meet the designer cocktail party.” Because Bob loved this designer’s lines he had all intentions of meeting this designer. He met the designer at the cocktail party, had his picture taken with him, and shared the story. The designer said that they didn’t discount any of their pieces online because it wouldn’t be fair to the stores. Bob who didn’t want to disagree, respectfully disagreed and this designer’s assistant, who was by his side, tried to let the designer know that they did discount by 10%.
This designer had no idea what was happening on his own website in his own business. He made a statement that he would rather lose the sale than to hurt his stores, which was the right thing to do. The only problem is he never bothered to share that with the people who are running his company. Do you know if your employees are representing your policies the way you want them executed?
There is a much larger issue that must be addressed, and that is the fact that the independent retailer is not playing on a level playing field. For example, you can purchase an item online from Amazon and pay no sales tax but go into a store which is selling it at the exact same price but has to add another 6%. At other places it is as high as 8 or 9%. If Congress needs to raise money, I wonder how much 6% of Amazon’s total sales would add up to. It might not get us out of the deficit, but it would be a good start. This condition must come to an end, otherwise we are just handing business over to online merchants.
I am writing this article on Cyber Monday and have been amazed at some of the deals that are available today online. We can NO LONGER even think about even trying to compete on price. We are specialty stores. Let’s make our stores special.
Lastly, THANK YOU American Express for making the Saturday after Thanksgiving Small Store Day. As they say it’s going to be big. Let’s all get behind it for future years.