Monday, January 10, 2011

CHEAPER ONLINE? DON’T BE TOO SURE!

Just before Christmas last month, a front-page headline in The Wall Street Journal shrieked: “Phone-Wielding Shoppers Strike Fear Into Retailers.”  The gist of the article was that bar-code-reading smartphones enabling everyone to instantly compare what’s on the shelf with online prices will lead to retail Armageddon. Brick-and-mortar stores out of existence, cats and dogs wailing, gnashing of teeth.

BREAKING: ALL PHYSICAL STORES SUDDENLY OUT OF BUSINESS!

We think not.  But things will certainly get interesting.

First of all, it’s not always the case that online is cheaper.  In the New York-only current incarnation of Goodzer, we’ve seen a number of instances where the in-store price was lower than any online price. True, sometimes the products are loss leaders -- the age-old merchandising ploy of selling an item at or below cost to get bodies into the store (where they’ll likely buy more). But still, it’s the best price -- and often on popular items.

Secondly, transparency in pricing is certain to stir up some new market dynamics. (Really, how much longer do we expect the “no Internet sales tax” to continue?)  Merchants will react.  They know their business and their customers -- and those who’ve been around for years (or decades) have already had to compete with Wal Borg, and their resistance has been all but futile.  Merchants know that the right combination of merchandising, service, and loyalty programs can keep customers coming back. Sure, it’s a brave new world, but successful retail has always been about savvy marketing -- only now, things like bundling, extended warranties, and couponing will be mandatory to compete.

Groupon, LivingSocial, and other social business sites have heralded a new era of retailing, proving that the Internet can drive offline business. Goodzer will take things one step further next year, when we introduce instant price matching and other real-time incentives that marry location-based product search with coupons.

Finally, the WSJ story focused on Big Box “the guys in blue shirts are never any help” retailers.  But we here at Goodzer love to remind everyone that 95% of all stores are independent.  Goodzer is about the convenience and expediency of all local stores.  If Karl’s Korner Kamera shop has what you need, in stock, right down the street -- and you’d like to hold it in your hand to see if it feels right -- you may just want to spring for the few extra bucks.

We live in interesting times, as they say.  Goodzer is a part of retailing’s new world order . . . and in the end, we will help you win, online or offline.

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