No Soup For You!
Anyone who’s seen Seinfeld knows of this iconic line. The owner of the local soup shop barks these four words and refuses to serve anyone who questions him about his scrumptious creation, or utters anything but the basic order for the hot, ample goodness in the desired flavor, the way it should come. Ah, if only business were booming so nicely that one could take such liberties today. It seems, however, that some companies are using equally harsh tactics in order to combat the tough economy.
They aren’t refusing customers, but in a way, they are. The Vera Wang boutique in Shanghai, China is asking customers to pay almost $500 just to book a 90-minute time slot to try on wedding dresses. In Brisbane, Australia, a specialty food store has decided to make customers pay a $5 fee for “browsing.” In both cases, the fee will be discounted should the customer make a purchase. The specialty food store owner says she made the decision because she found herself giving advice, tips, and loads of valuable information to customers who then would take it and buy elsewhere.
It’s called showrooming; the act of touching, feeling, and price checking in store, then buying elsewhere, typically online. And it’s affecting retailers of all kinds, clearly right from apparel down to food.
It’s a hotly-debated topic. On the one side, retailers don’t want to share their precious knowledge and experience, and take the time to educate and inform a shopper only to have him buy elsewhere. On the other, the customer is always looking for the best deal, and if he can get it elsewhere, who can blame him for doing so?
But is charging customers just to browse the answer?
As a store owner, apply the logic to the job of the manufacturer/distributor salesman pitching his product to your store buyer. Imagine if he says he has the latest line of TVs, or mobile phones, or tablets, or digital cameras, or whatever, to show you. But here’s the catch: you have to pay him $100 to hear the pitch. If you sign a purchase order, you get that back. If not, well consider the money a fee covering his time and energy.
Aren’t these the very kind of fees we as Canadians have fought to eliminate from things like mobile phone carrier contracts? That pesky “admin fee” that essentially covers the time it took for the customer service rep to talk to you and run the purchase through or call up your account details? Isn’t this part of the job? Since when have sales come with a guarantee? Wouldn’t it be fantastic to guarantee sales every time you walk into an encounter because the shopper is being forced to pay just to look at what you have? Businesses would be booming across the country if this were the case. That, or the exact opposite: shoppers would just be more inclined to buy online, where they can click a button and do so for free, without even leaving the home.
On the extreme high end of the market, the entrance fee strategy might work. But chances are if I’m a wealthy client walking into Vera Wang, the store likely knows who I am, and wouldn’t dare ask me to pay money to browse. For those who aren’t so well known, they might view it as a sign of prestige to pay. But can you imagine such a strategy at a local big box, or independent CE store? Customers would be outraged (as they apparently already appear to be out in Brisbane) at the gall, the arrogance, the ignorance of the store. How dare you put yourself on such a pedestal to assume your product knowledge and demo is a waste of time if I decide not to buy? What if I pay only to encounter a sub-par salesperson? Will the store pay me for wasting my time?
There’s a fine line between an ignorant customer and one who legitimately wants to research a product before buying; or might research and find that it isn’t right for him. Likewise, there’s also a fine line between a salesperson who doesn’t want to divulge his vast knowledge only to have the customer shop elsewhere, and one who’s just plain lazy and doesn’t want to waste his oh-so-precious time on a sale that doesn’t line his pockets. (Oh, if only sales were so easy!)
The strategy seems to be taking combating the showrooming issue a step too far. What’s next? Bouncers out front checking shoppers’ credit cards, limits, and financial status before determining if they’re worthy of entering?
Here’s something to consider: the Brisbane store owner claims that her store’s pricing is competitive with others, but customers don’t realize this. Customers aren’t stupid. And if they aren’t taking her “valuable” information then shopping elsewhere on the basis of cost savings, why are they doing it? She, like many other retailers, need to find the answer to this question. And if, as she claims, the customers really don’t realize her pricing is competitive, why isn’t she doing more to advertise this? To make customer’s aware? Surely in her detailed conversations with these supposed showroomers where they walk away after stealing her vast knowledge, she must be able to find 15 seconds to convey that she offers competitive prices, and perhaps even that she’s willing to match pricing should the customer believe he can find something elsewhere for less.
Retailing was never easy, but it’s arguably never been tougher. Traditional bricks and mortar stores are not only competing with the retailer down the street. They’re now competing with the World Wide Web. And smartphones that make it easy for a shopper to, within minutes, find another store, Website, or even a friend selling the very item he seeks for less money.
The no soup for you browsing fee might be a model that works for some. But most retailers should approach the strategy with caution. Most shoppers will likely respond by simply heading back home, or to the local grocery store, where a quick bowl of piping hot chicken noodle can be acquired within minutes.
