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The ugly side of online shopping

Date

Daniel Morrissey

Shop owners are sick of people scoping their stores - only to use information to buy cheaper products online.

And now, some bricks-and-mortar retailers are fighting back.

Retailers are charging people to try on shoes and clothing.

The nation’s peak retail industry group is aware of a few retailers in the ski-boot business that apply a fitting charge which is then subtracted from the final bill if the product is purchased.

‘‘They’re certainly at liberty to do this and there is no rule stopping you,’’ Australian Retailers Association executive director Russell Zimmerman said.

It is a decision for each retailer to make.

Mr Zimmerman said retailers were hurting from high employment costs, such as weekend penalty rates, expensive rent in shopping malls and the GST exemption on overseas purchases up to $1000.

‘‘Those are the costs that are in actual fact making it difficult for retailers to be competitive against overseas retailers,’’ said Mr Zimmerman, who has owned the Sparke’s Shoes retail chain since 1980.

A fall in consumer confidence this month to its lowest level since August last year, according to the Westpac-Melbourne Institute survey, released today, compounds retailers’ problems.

Online retail sales make up about 5 per cent of purchases, of which about half of these are to Australian online retailers. But the online retail market is growing quickly.

A brand-marketing expert advises against applying fitting charges as an online countermeasure and argues retailers should be ‘‘selling the shopping experience’’ and ‘‘building that relationship’’.

Tony Eades, the creative director of BrandManager, said retailers should not be cutting corners ‘‘by putting the younger school kids on and not training them properly’’.

Too many discount sales also hurt traditional retailers, Mr Eades said. They should be offering value to customers through two-for-one deals or a free gift with a purchase.

‘‘One of the issues we’ve always pushed with our clients is that if you discount something it’s very hard to then sell that product at the right price later,’’ Mr Eades said. ‘‘People price it at its discounted price and that’s what it is worth.’’

Ideas such as ‘‘special previews’’ made customers feel important. ‘‘It costs a couple of glasses of wine and some pieces of cheese, but those people feel special,’’ Mr Eades said.

ACT Chamber of Commerce and Industry chief executive Chris Peters said the retail business was forever evolving but it was important to provide professional customer service.

He said consumers were using smartphones to compare prices between rival stores and asking retailers to ‘‘match that’’, a far more significant threat than online purchases from overseas.

The skills levels of some sales assistants was a concern, Dr Peters said.

‘‘Being a retailer is and has always been a skilled expertise,’’ he said. ‘‘It’s not a matter of having an idea and filling up a store with stock and waiting for customers to walk in.’’

Canberra Business Council is running courses through Canberra BusinessPoint, which provides advice on adjusting to the business cycle, to help retailers adapt to the small but growing online threat.

‘‘What we are saying to a lot of retailers is not to necessarily give up your bricks and mortar store but supplement it with an online presence,’’ CBC chief executive Chris Faulks said.

126 comments

  • I have no objection to paying for a service (such as a ski boot fitting). It is pretty cheap of someone to take up 60 mins of a sales person's time to then buy on the internet to save $150 bucks (probably most of the cost of that person's time (factoring in overheads)). What I object to though is paying an additional $150 bucks for something where the sales person just puts something into a bag for me. These stores deserve to lose out to online retailers. Evolve or die.

    Commenter
    Shopping of the future
    Location
    The Gap
    Date and time
    April 11, 2012, 6:52PM
    • Sadly for a lot of retailers, price will always be the deciding factor for a good portion of shoppers. These people are not interested in service or exclusivity.

      I think charging to try on something like ski boots is reasonable, assuming the retailer has a good product range and appropriate stock levels in all sizes. It should not discourage genuine buyers. I don't think this would work in normal shoe shops though, where many purchases are made on impulse.

      Commenter
      melbmeg
      Location
      Melbourne
      Date and time
      April 11, 2012, 6:57PM
      • "The nation's peak retail industry group is aware of a few retailers in the ski-boot business that apply a fitting charge which is then subtracted from the final bill if the product is purchased."

        I'd guess that any effect this has in stopping people shopping online is substantially outweighed by the fact that people don't want to shop somewhere they can't try on boots without committing to buy something.

        It's hare-brained schemes like this that are the root cause of retailers going out of business.

        Commenter
        Sam
        Location
        Melbourne
        Date and time
        April 11, 2012, 7:06PM
        • This has been a long time coming. Using stores as a free fitting service is tantamount to fraud, and is totally unsustainable in the long run. If you need the additional service of trying on clothes before buying, be prepared to pay for it, you cheapskates.

          Commenter
          Dave S
          Location
          Melbourne
          Date and time
          April 11, 2012, 7:07PM
          • Oh my god, this is crazy. Charging customers for trying clothing or shoes on? Serious, I would walk out out these stores immediately. Epic fail.

            Commenter
            tomnuen
            Location
            Sydney
            Date and time
            April 11, 2012, 7:12PM
            • I took 2 hours to test my ski-boots properly because you can't afford a mistake with ski-boots. If I was in a cafe for 2 hours I would be expected to put up at least about $50. People don't understand the huge rent retailers have to pay, never mind staff costs, tax, admin and shoplifting.

              Commenter
              .bg
              Date and time
              April 11, 2012, 9:50PM
            • Don't walk in , in the first place if you are using the store as a fitting room. Get back to your PC and then one day wonder why all the shops are empty and it's all warehouses.

              You are creating your own future.

              Commenter
              a country gal
              Date and time
              April 12, 2012, 12:41AM
          • The shops I'll go back to are the ones with good advice, decent service and a good inventory. If I get no advice, bad service and I have to wait for something to be ordered in, I might as well get the same thing online and save money.

            Commenter
            rl
            Location
            sydney
            Date and time
            April 11, 2012, 7:12PM
            • Guilty, I've done this with shoes - but to me, this issue is more about why retailers are paying a higher wholesale price than the overseas retailers are charging.

              The retailers should cut out the wholesalers and go direct to the source for products, it's what online stores do and with today's technology there is no excuse for retailers not to be doing it.

              Commenter
              mike
              Location
              Cremorne
              Date and time
              April 11, 2012, 7:14PM
              • i dont mind paying a little bit more in australia. i understand that it's more expensive to get the products out here as we have much lower population density and fewer people. but the gap is much too large - it's unreasonable!

                Commenter
                n
                Date and time
                April 11, 2012, 9:47PM

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