Darwin’s Theory of Shopping
In an editorial piece on CBC’s website about the closing of Future Shop stores in Canada, the author stated that Future Shop fell victim to ‘pampered’ and ‘lazy’ shoppers who preferred to shop online rather than get up off the couch and go to a store. Needless to say, that got the commentary going below the article and it wasn’t very complimentary.
Normally, I tend to take with a grain of salt, most of the comments that follow a news article but I agreed with most of them this time because they were right and the article’s author was quite simply, just wrong.
The Internet continues to change how we do things. It’s really just that simple. It has changed how we get informed, how we entertain ourselves, how we work, interact with each other and how we shop. If it could feed us, we’d eat on the Internet.
Not all of the change is good but then change is never all good or all bad. It’s just change and you either learn to adapt to the changes around you or you get run over by them.
The Borg tried to warn us more than once that resistance is futile.
It is particularly difficult for the mainstream media which uses the Internet to gather and deliver information as well while competing with the myriad of websites that freely give away most of the same information. Often, the Internet will have breaking news available before most mainstream media and far more commentary on it than any single newspaper or electronic media source can provide.
Benghazi was a perfect example of that.
The Sun News Network went off the air earlier this year and many of its supporters blamed the CRTC for not granting mandatory cable coverage but that wouldn’t have saved the network. Quite simply Sun couldn’t compete in the information age. Its content was too narrow, its presentation too dated and that simply limited its appeal. For news from a far-right conservative perspective, there are countless websites that deliver more than Sun could and they have significantly higher audiences than Sun ever attracted.
Some of Sun’s former on-air personalities are now working to establish an online presence under a new brand and they may eventually find a larger audience than they ever could have while working for Sun.
Sun’s challenges were not completely of their own making; most mainstream media are facing similar challenges.
Newspapers, for example, still haven’t found a new business case to compete effectively with what other online services give away for free. Most give a limited number of free views per month and then try to get readers to subscribe but that’s a very old model that dates back to the newsprint days. Get a few weeks free and then subscribe. People just aren’t lining up in droves to pay for what is readily available elsewhere free of charge.
Traditional in-store shopping is competing with a more convenient and less aggravating experience online. Somewhere in their rush to embrace new technologies to run their businesses, they lost sight of the customer experience. They talk about it but they’re like politicians talking about democracy and transparency in government. It’s just talk without substance.
Online shopping is not only convenient, in many cases it’s faster, usually cheaper and provides better customer service. The customer service in many retail outlets these days is atrocious.
I recently bought a 50 MM lens on line after having purchased a 35 MM locally at a camera store. Here’s how the experience compared.
It took twenty-five minutes to drive to the store’s nearest location and I spent another twenty minutes trying to find a downtown parking spot. Once in the store, I had to wait for another twenty-five minutes while the salesperson I had pre-arranged to meet finished working with another customer. While I was testing the lens, she went off to help another customer and I had to wait again for her to finish so that I could complete the purchase. Total time to buy the lens – 2 hours and this was after waiting a week for the lens to arrive at the store.
When I purchased the second lens online, it took about twenty minutes of comparative shopping to find the best price and three minutes to complete the purchase and arrange delivery. Five days later, it was delivered to my door. If I had needed it faster, various expedited shipping options were available.
I also saved about 20% over the in-store price even after including the additional cost of shipping and import duty.
That is the reality that bricks and mortar retailers are facing and if they want to compete, then they’re going to have to make some serious adjustments to how they do business including significant improvements to their customer service and pricing models.
The Bay has shown a fair degree of innovation with its ‘flash’ sales, using their extensive email lists along with traditional advertising to advise customers of sudden one-day sales with significant price savings. That’s a better manner of using technology to support a bricks and mortar operation than many retailers who still use traditional paper flyers. It creates interest and urgency which generates a response. Significantly, the Bay also facilitates buying the sale product online and usually with free delivery.
But stores like The Bay are the exception that proves the rule.
It doesn’t matter at what time of day you go to most major retailers these days; you’re going to end up standing in a line waiting for the privilege of giving them your money. When the store isn’t busy, they limit the number of available cashes. Equally as frustrating is that many retailers use tehir cash systems for inventory control and accounting purposes rather than facilitating the customer’s purchase (Canadian Tire is one of the worst offenders). Typically, many of the store personnel are minimum wage or part-time, often young people working a job while in school who really don’t know very much about whatever it is you’re buying. In many stores, sales people are pressured to push specific brands to benefit the store’s bottom line.
There are exceptions, of course. Home Depot offers excellent and knowledgeable customer service and competitive pricing and it isn’t always practical to purchase large items like appliances and cars online although even that is changing. But typically, most traditional retailers just don’t get it.
Target didn’t get it when they launched in Canada. Their supply chain was a disaster and their stores often lacked many of the items shoppers wanted. Target didn’t understand their market and typically looked like a dressed-up Zellers with half-empty shelves. Even their website was a major fail. Not only could you not purchase online, you couldn’t even peruse the product selection stores carried. It was basically a multi-page ad for Target and in this day and age, that’s just a waste of everybody’s time.
In other words, Target Canada didn’t come close to matching the pre-launch hype or customer expectations which means it couldn’t compete with other stores let alone in the online marketplace.
There are major players in online shopping. Some American, single location stores have a huge, global online presence but clearly the leaders are eBay and Amazon. Both have similar but slightly different business models.
Amazon is both a store from which you can buy directly and a website through which other retailers can sell.
eBay doesn’t stock anything. They are strictly a web site where individuals and retailers sell their products. Customers can not only shop globally for bigger savings, they can choose between new and used or to bid in auction format or to purchase for a fixed price immediately.
Is it popular? I would think so considering that eBay generates about $15 million US a day — and they don’t actually sell anything to anyone. They are simply a conduit for anyone who wants to buy or sell literally anything. Nonetheless, eBay provides a money-back guarantee in the off-chance the seller fails deliver. By contrast, most Canadian retail stores now tell you to contact the manufacturer if you have issues.
The simple fact is that traditional retailers either can’t or are unwilling to compete with that level of customer convenience and value. Prices are lower and selection is extensive. Customer service is being driven by the global competition in which all online sellers operate. Too many mall retailers operate on the principle that once a customer is in the mall, they probably will purchase rather than drive to another mall and that complacent attitude is killing customer service on the ground.
At a time when many Canadian retailers still charge customers for a plastic bag in which to carry home their purchases, Amazon is now upping its game and testing delivery of parcels using unmanned drones. It is this nickle and dime attitude of traditional retailers compared to continual innovations in service offered online that are also driving customers to Internet shopping.
Box stores are already finding it increasingly difficult to compete and they were considered the single biggest threat to smaller retailers just a few years ago.
Tanger Outlets opened in Ottawa late last year to much fanfare but that has quickly turned to disappointment as shoppers who were expecting to find comparable savings they had experienced at U.S. Outlet Malls were treated to minimal discounts of 10-20%, often on two or three-year old stock.
It’s a retail mentality stuck in a time warp.
It isn’t just climate that changes, my friends. Change is the only constant in the universe and if you don’t adapt to change as it happens, you disappear. That’s the science behind Darwin’s Theory of Evolution and it applies as much to shopping as it does to different species that have come and gone.
Technology is driving much of the change we are experiencing now and it isn’t going to slow down. Each change accelerates change; each innovation leads to another and the simple reality is you either adapt or get left behind.
It has nothing to do with customers being lazy as the CBC piece suggested. People vote with their wallets and will always gravitate to the best value which is a combination of product quality, price and service. Increasingly the best shopping value is not being offered in-store and either retailers begin to understand that simple fact and evolve and adapt to the new reality or they will simply disappear just like Cleo, Target, Future Shop and many more already have.
Bricks and mortar retailers would do well to remember that nothing, as dinosaurs, and Lehman Brothers have already proven, is too big to fail.
© 2015 Maggie’s Bear
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