
Phone-Wielding Shoppers Strike Fear Into Retailers - andre3k1
http://online.wsj.com/article/SB10001424052748704694004576019691769574496.html
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stoney
I sometimes feel a bit bad about price checking items in a local shop against
the web. For example, I wanted to buy some climbing shoes recently. I have
never bought a pair before, had no idea what I should be looking for and what
size I should get. I went to a local climbing specialist, they talked me
through the options, fitted me for a shoe, etc. At that point I could have
left the store and bought the shoes on eBay for about 75% of what they would
have cost in the store, but I didn't - I chose to pay full price because the
store offered me a valuable service. If that store hadn't been there I
couldn't have tried on the shoes. So I think there is a place for paying more
for goods when you want/need extra assistance.

In the case of huge stores like BestBuy that are basically like a warehouse
with pretty much no customer service except at the checkout I would have no
problem buying from the cheapest alternative provider (Amazon/ebay/whatever).

~~~
kgermino
I would say that it's OK to walk into a store and price compare with other
stores, however I personally agree that it's immoral to use the brick and
mortar store to discuss the options and decide what you want to buy, then buy
it online.

Some stores are for when you know exactly what you want and just want the most
convenience and the best price, others are for actually shopping:
investigating your options and deciding what works best for you. Helping you
shop costs money. It's immoral to steal the stores time discussing what to buy
then buy it from Amazon because it's cheaper.

~~~
riffic
stealing time?

This may be against your own personal morals but it isn't a crime to waste
other people's time.

~~~
jackowayed
He never claimed it was a crime, just immoral, and I agree.

If the store provides you a valuable service, like allowing you to try on
shoes or giving you significant advice on which product to buy, you should buy
the product from them so that they get profits with which to cover the cost of
providing that service.

Now, it depends how extensively you used their resources and how much of a
markup they want. If you were in the store for something else and all you did
is wander around to try to get ideas of what else you wanted, I don't think
there's much obligation to buy. But if you're spending 15 minutes talking to a
salesman about all of the possibilities (especially if you wanted to ask him
the questions, as opposed to him seeing you in the area and approaching you to
try to close the sale and upsell you) or extensively trying out the demo
units, the store is providing you value and you're using resources that cost
them money. As long as the additional markup that the store wants is fair (for
an example of unfair markup see the guy who chose not to buy a $40 DVI-HDMI
cable that costs <$3 on monoprice), you should compensate them for the value
they provided you and buy from them.

~~~
riffic
there are no clear ethical boundaries here; morality is hardly universal.

I'd like to stay focused here on the so-called immorality. kgermino's choice
of words to "steal the stores time" implies theft. I'm not sure if I see eye
to eye with this description.

[edit: I'm curious to know why i'm being downvoted here without any followup
reply. nothing that I've stated is factually inaccurate - morality refers to
personal values, which vary between person to person.]

~~~
locopati
Does it help to turn it around - you are paying a (probably marginally) higher
price in the brick and mortar store in gratitude for the service (advice,
time, hands-on experience with the gadget) they are providing. Nothing stolen,
but fair compensation provided for information obtained.

~~~
jasonlotito
> advice, time, hands-on experience with the gadget

Only if I can trust that the advice, time are all beneficial to me and not the
store, which I can't, especially if I'm not dealing with a specialty store.
More to the point, does the higher price justify the less then trustworthy
advice provided?

If brick and mortar stores are only offering questionable advice and a hands
on experience in exchange for the same product at a higher price then the
online store with lower cost, then they have to compete with that. If they are
providing real value, then they'll do fine.

The problem is, no one wants to pay for advice.

The assumption here is that this is just with online stores. Offline stores
also compete as well, and not just using price, but real value-added services.
If I got to store-x to learn about a product, an then end up purchasing at
store-y because they provide greater value, am I doing wrong?

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randrews
The "Expected growth in merchandise purchases made on cell phones" graph in
this article may be the worst one I have ever seen. They extrapolated an
exponential growth curve from _one point_. They only have data for 2009! Not
even 2010, much less the 2014 they plotted out to!

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noonespecial
I'm hoping that this trend ends with the re-introduction of something I've
long felt is missing from the American shopping experience. The ability to
haggle.

Circumstances surrounding items in stores change by the minute. Things like
demand, how long an item has been at a store, the fact that an updated model
was just released, etc. American retail stores seem bound to the retail price
set in the computer even when that price has been made absurd by unfolding
circumstances. It would be much better if the staff were empowered to deal
than to ship unsellables off to some giant auction house to get pennies on the
dollar.

Of course, that would mean creating a chain of authority in stores ending with
giving minimum wage employees _responsibility_. Then again, if you can give
them a cut for upselling those ridiculous "monster" cables, they may relish
the opportunity.

~~~
fleitz
I haggle at almost every store on anything more than $100. Seriously, what
store won't let you haggle on a major purchase?

My favorite haggling technique is to ask about the credit options and extended
warranty.

If you're going to haggle, act like you're going to buy it on the store credit
card with extended warranty.

~~~
noonespecial
I usually try as well. Sometimes it works, more times it doesn't. It almost
always comes with an odd look or the great big "you just added a lot more work
to my day" sigh.

I usually go after the "last years model" or "clearance" type items, iphone in
hand to demonstrate the current retail value. The most they'll ever do is
knock a few percent off and offer me a free cable or something. Their best
offers are almost always still ludicrously beyond the reasonable current
price. Trying for more gets us a little session at the Altar of the Wyse
Terminal, followed by a shrug and "It won't let me do that". Even when the
manager is involved.

I'm hoping that bargaining in retail stores will become both common, fruitful,
and a socially expected norm.

~~~
ams6110
I don't think it's likely. It doesn't scale to the transaction volume of a
department store. Imagine you're in the checkout queue at Walmart and the
person ahead of you is trying to bargain with the cashier for 20 minutes to
try to save a few dollars.

~~~
noonespecial
I've seen some pretty impressive scale at markets in other countries,
bargaining and all. Perhaps its Walmart that's the misfit?

------
WillyF
I go to Borders all the time to find things I should buy on Amazon. I rarely
buy anything. Why would I when I can get the same book half price and have it
in 2 days (or now instantly on my Kindle)? Borders doesn't offer enough
additional value to make me feel bad about this. I'd have to be stupid to pay
their premium.

Yet, when I buy fly fishing equipment, I almost always buy from a local
store—and even the "big box" store, Orvis, offers a fantastic in-store
customer experience. Why am I loyal? Because they don't try to sell me crap.
They let me hang out and talk fishing. They help me find new spots and learn
about new techniques. There's a huge value add, and I'm willing to pay a
premium.

Big box stores put a lot of mom and pops out of business in the 90s and 2000s.
Now they're getting killed by online retailers. I'm not sure who's going to
take out Amazon, but I wouldn't be surprised if there's some level of
resurgence when it comes to local retailers who focus on service.

~~~
gjm11
> I rarely buy anything [at Borders]. Why would I when I can get the same book
> half price [...]?

Because you've made use of the facilities at Borders that make them need to
charge you more -- the physical store with a stock of physical books and
actual staff who can help you if you can't find something or want extra
information. You've derived a tangible benefit from your use of those
facilities: you've found some books that interest you, and established that
some others aren't worth what they cost.

Sure, no one is then forcing you to buy the books in Borders; neither the
police nor Borders staff will give you any trouble for freeloading. And it's
not actually against the law. If that's all you care about, fair enough. But
it's not like there are no reasons for buying things in a bookshop when you've
benefited from the things they offer and Amazon doesn't.

Another reason: If you find Borders useful, then you'd probably prefer them to
stay in business. You might want to help with that. Again, no one's forcing
you to, and you may just not care much about the tragedy-of-the-commons effect
that may ensue when you and others don't. But it's a reason.

> Borders doesn't offer enough additional value to make me feel bad about
> this.

You can give them some but not all of the additional value by buying some but
not all of those books from Borders. For instance, the ones where the price
premium compared to Amazon is smaller.

(For the avoidance of doubt, I'm not saying "Bricks-and-mortar good, online
bad". I buy a lot of books on line, more than I buy in physical bookshops.
Amazon offers useful services that Borders doesn't -- customer reviews, the
recommendation system, and so on. If you've benefited from _those_ , that's a
reason to buy from Amazon.)

~~~
mike-cardwell
The staff at brick and mortar stores don't help you for altrusitic reasons.
They do it because it increases their sales.

~~~
trotsky
What, in borders? I'm pretty sure they're not on commission there.

Borders is a pretty meh experience though. You'll get a much better local
experience going to a place downtown with a good reputation like city lights,
the tattered cover or the strand. They have a lot of reasons to support them -
book readings, local authors and topics, live music, staff picks, newsletters,
passionate buyers, enthusiast staff.

~~~
mike-cardwell
I've never been in a Borders, but I assume that the staff are paid, that their
bosses tell them to help customers, and that their bosses do this in order to
increase sales.

~~~
trotsky
True enough, but they do still represent a value added service. It seemed like
you were saying that because it wasn't altruistic it should be left off a list
of reasons to support them. Amazon doesn't discount for altruistic reasons,
they do it to increase sales. But obviously you consider a discount real value
no matter what the intention is.

------
trotsky
People need to square up in their heads that the retail experience
necessitates higher prices. If you don't want to pay the higher prices, that's
fine - but then what are you doing in the store in the first place? Pretty
much everything is cheaper online. If you need to go to best buy or borders to
find the product you want on amazon, the whole process is unsustainable.

Also, just like supporting locally owned business, supporting locally operated
business is in your best interests. They create local jobs and contribute to
the local tax base.

I know this isn't a popular opinion, but the sales tax disparity needs to go.
The states get triple penalized by it - lack of tax revenue, lack of jobs and
it creates a disincentive to online retailers to spread their operations.
Maybe they all need to drop it entirely and raise income taxes to make it up
(which isn't a bad idea, sales tax being at least somewhat regressive). If
not, they need to find a way to collect it.

I have no doubt that this trend will accelerate though, I am guilty of doing
it myself. Just like we didn't really realize what we had lost with local
farming and the corner hardware store until they were mostly gone, we probably
won't realize how much we miss local retail until there a huge portion of
goods simply can't be found in person.

~~~
tomjen3
There is some value in getting the item today, even if it cost a bit more than
getting it online. In addition, you avoid paying for shipping.

The difference is what the local business can charge over the online option.

~~~
trotsky
Then in the day of amazon prime free two day air, I guess they really are
doomed. You simply can't compete with the economies of scale and purchasing
power of an amazon while at the same time paying a 5-7% penalty, a lease,
insurance, utilities, shrinkage, etc.

Let's say 1 in 10 things you purchase you need to buy today. That means 90% of
purchases should be online the way you see it. But if local stores suddenly
lost 90% of their business, the prices on the 10% would have to go way up.
They'd have to stop stocking a lot of items, lower inventory on the rest.
Their buying power would be destroyed. The enablers of retail would dry up -
distributors close, regional truckers take jobs with ups, they tear down the
storefronts and put in housing.

Once you lose something it can be hard as hell to get it back. Want to buy US
made textiles? Good luck. To buy local produce I am a member of a CSA - I have
to pay for a year upfront, pick up my box between 4:30-6:30 friday, have no
real control over what I get, if I need extra for a dinner party i'm out of
luck, and I think there is a 2-3 year waiting list. The local meat and milk I
buy is illegal, the regulatory environment has long moved past small
producers.

Want to shop at a locally owned hardware store? Hopefully there is one still
open around you. If there isn't, how do you signal that you want one? Their
owners have retired, nobody is learning how to run one, the banks wouldn't
lend to a new one anyway.

Online shopping is cheaper right now because it has to be. If the retail
framework went away would it stay that way? It would make sense to raise your
margins in an online only world. Transparency and dynamic pricing means you
can always go back down if someone undercuts you. Manufacturer quality may
dive as well. If you make a mis-stitched or badly sized piece of clothing it
simply won't sell at retail. It will always sell online. How many people will
return it? Certainly not 100%

Exclusivity is another issue. Once you don't need to support retail, you can
supply 100% of your customers from just one or two websites. Manufacturers
love this. Don't like the discounting? Raise their wholesale cost. Tie
products, lockout competition, force sites to take your whole invetory as it
rolls off the line.

Places like Apple are so vertically integrated it'd simply make sense for them
to sell direct only. They'd keep the apple stores open - after all they won't
be undercutting themselves. Buying a copy of OS X? No problem, just need to
verify that you've registered an approved platform with us. Jailbreaker? If
they know who you are you go on a lifetime ban list. Friend buys you the new
phone? If we track down the udid you're using then he's banned for life too.
Bet that'll make you rather unpopular.

Retailers need to rethink old marketing strategies in the age of price
transparency. Loss leaders and make up items give you too much incentive to
shop around. If I knew everything at a store was reliably 15%-20% over the
best online price I wouldn't feel the need to pull out the phone and check
prices. It's the fact that there are little +50% or +300% landmines - and once
I've found one of those and will order it online instead it seems silly to buy
these other lower markup items in store when i could just add them to my
online order and save a bit more. Move to shelf dynamic pricing to respond to
online changes quickly. If a product does 97% volume online and 3% in your
store, fuck it, dump 'em and choose another or private brand it. If 50% of the
people who inspect a product in your store go on to buy it online demand
promotional fees from the manufacturer and use them to offset higher costs.
Integrate better with the community - support local schools and charities
instead of national ones, stock local/regional brands, don't fight to open
somewhere you're not wanted. Make it so people want to shop at your store to
show their gratitude. Tell the local stories all over your store so everyone
has a reason to think twice before opting to shave a couple bucks off. Dump
the shady sales tactics, flatten commissions, fire anyone caught lying, speak
honestly about product shortcomings, never use ignorance to oversell. If
people know they can trust your sales staff they'll go to them a lot more, and
people getting real help from a salesman don't pull out their phone and order
it online at the end.

~~~
tomjen3
Presumable the stuff I actually need to buy locally is the same as what other
people need (milk, perishable items, meat, the occasional bottle of wine).

That just means the stores will have to be small (which is a benefit for them,
since they have a smaller number of items in their inventory).

As for starting new types for stores? That happens surprisingly often, but
obviously since most consumers don't give a hoot about who owns the store they
shop at, it usually doesn't work.

------
Umalu
At least shoppers with bar code scanners are still visiting stores. What
should really be striking fear and terror into the hearts of retailers are
shoppers who never set foot in stores anymore, people who, like me, order
everything online.

~~~
gmjosack
You're not consuming time of their staff asking questions and using resources.
People who go to the store to get information with no intent to buy are worse
than people who just ignore the store.

~~~
tomjen3
Not really - with Amazon you have to add shipping and a trip to the local post
office (since they _never_ deliver when you are home), and nobody is going
across town to save 20$ on a several houndred dollar widescreen tv.

But when you don't go to the store _at all_ there is no way they make a sale.

~~~
gjm11
The cost of the TV shouldn't make any difference to your willingness to go
across town to save $20. Saving $20 on something that costs $400 gets you
exactly as much benefit as saving $20 on something that costs $40.

That's not to say that you should be going across town to save $20 on
anything. It might well not be worth the cost in time and fuel. But doing that
to get a $20 item free, or a $40 item at half price, shouldn't be any more
appealing than doing it to get 2% off the price of a $1000 item.

(It's a serious bug in our wetware that all the above feels so unintuitive to
most of us.)

~~~
tomjen3
Yeah but if you can afford several hundred dollars for a tv you aren't likely
to be in the category of people who care about $20 bucks, whereas if you buy
something for $40 you might.

So thats why I wrote that.

------
happywolf
Instead of checking the price, I check on the reviews for the product while I
am in store, especially if that product is something I am not familiar with.
Recently I went to shop for a compact camera with no particular brand in mind,
I went to the shop, checked out what's on offer, and read the reviews on the
spot via my iPhone. This process helped me to weed out a few cameras, and
finally I got a camera (Canon Ixus 130) at a price that I am happy with. Since
I already know the pros and cons of this camera, I must say I am quite happy
with my purchase as it removes a lot of uncertainty from the purchase (No,
AFAIK, most shops in Singapore don't provide refund or exchange for
purchases...)

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erikstarck
I wonder if there's an opportunity here. What if you had a store where you
couldn't actually buy stuff (well you could order stuff from affiliate
partners) and it cost money to enter?

Sort of like a fair but always running and on a central position. A gadget
paradise of sorts. I think it would work.

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jboydyhacker
While it's true that this trend favors those who are price leaders, there is
another opportunity. As people are connected with reviews, content, and
comments from other users new conversations can take place between the
retailer and their customers.

That's an opportunity for retailers to do targeted marketing with deals,
specialized advertising and in store games, so that they are not just
competing on price but on the long term relationship and buying patterns of
the customer.

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syllogism
I want to know what PR firm is behind this so I can hire them. What's an
article like this worth to that shopping app? 100k? More? Good lord...

------
fleitz
Best Buy doesn't care about people price checking GPS units, they care about
people price checking HDMI cables. Watch for cell blockers to be installed
near the cable isle.

~~~
Zak
Cell blockers are illegal in the US. Even when the power is very low, if
there's enough circumstantial evidence to prove intent to interfere with a
transmission, I think that's an $11,000 fine from the FCC.

~~~
trotsky
Perfectly legal to install EM shielding or a Faraday cage. I bet you'd only
have to install a few of them before the mobile companies agreed to block
certain urls whenever they triangulated a phone as inside one of your stores.

~~~
Zak
Customers would riot.

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veb
And when do they ban smart-phones from being used in public because they can
take "hidden" pictures or some bullshit?

