I would like to add my thoughts and feedback on your recent article ‘If you’re not online, you’re not in the game’.
In reference to a store losing sales after 10 demonstrations — this was purely down to sales ability and the qualification process of the bricks and mortar store. I believe it is more of a [deep seated] issue, with Max Williams very much simplifying the issue at hand.
While many of us can improve with sales training, an end-user will simply not be prepared to pay what can equate to double the price (asked by a bricks and mortar retailer), versus buying from an online dealer who is prepared to make ultra-skinny margins on a like-for-like product.
This has nothing to do with sales ability, but is more the point of a retailer doing all the ‘heavy lifting’, only for the end-user to walk away and purchase the product online for far less. In a case like the above, the retailer has invested significant time (which is an overhead) in order to educate the public and create the demand. For an internet reseller to then undermine a fair margin for this is counter-productive in the long term for most products (except commodity products). For example, without the demonstration, would the end-user have just purchased online? Invariably the answer is ‘no’.
It must be outlined — there is a tipping point at which an end-user will pay more to purchase like-for-like goods from a local store than from an internet retailer.
Whilst I wholeheartedly agree that bricks and mortar stores do need up-to-date websites, to push and promote their services in their local area and to assist in educating consumers, your article seems to drive the point that these websites should be more sales-focused than informational. The reference to suppliers “forcefully resisting having pool shops sell their brands online”, and this in turn hurting pool shops and themselves, is a very interesting and a contentious point.
I will make reference to my above point about margins. If suppliers allowed a free-for-all, with all brands and sundry products being sold on the internet, we would find our bricks and mortar stores closing faster than we would care to imagine.
Taking that to the extreme, imagine if all pool shops created a website with ecommerce capability and attempted to sell at high margins locally (to cover the overhead of local demonstrations) and at lower margins outside their area. When the end user buys everything online, this erodes the entire network of bricks and mortar stores doing the local ‘heavy lifting’, leading to cannibalisation, closures and the loss of industry support and market development. If a new product comes along that needs that local development effort in order to create demand — there is no network left.
Some simple commodity-type products should be sold on the internet — on this I must agree — but there is absolutely a calling for some products to be sold only through the bricks and mortar channel. This is for the protection of this very channel and for the industry as a whole.
Suppliers that market via the web, providing information and intimate product knowledge and then referring enquiries back to bricks and mortar stores are the ones that are trying to protect their customers and the industry — not hurt them. This I can assure you!
Chris Papa
Business Director, Maytronics