How does the High Street compete with the Internet?
Recently there’s been a lot of talk about how unfair it is that the high street retailers have to compete with the £18 VAT avoidance that online retailers can work around if they sell their products from the Channel Islands. That’s been especially useful for CD and DVD retailers, the vast majority of whose stock falls within this price point.
It’s where Play, Amazon, Tesco and, yes, HMV, all base significant operations (or outsourced operations). With VAT going up to 20% in January, that means those savings are going to be even greater.
But the one thing some shops have tried to do to take on the internet retailers is to offer “Click and Reserve” schemes. These give you the best of both worlds. You check the price online, and what’s more you don’t have to wait until the postman comes knocking to collect your goods.
If you ordered your Christmas presents just a little bit too late this year, you may have suffered from the parcels not arriving. And of course there’s always the dreaded “You Were Out When We Called” card dropped through your letterbox – as featured in Miranda.
So collecting the object yourself can often be preferable assuming that the product is not too large for you to transport home. Argos were the first business to fully operate this to the best of my knowledge. They have unique advantages in that they operate very differently to others on the high street. Their products are all carefully stocked and catalogued in an adjacent warehouse. When a consumer orders a product, their systems quickly know that their inventory has decreased by one unit. Their branches only carry a selected range of items (wide though that range may be), and they therefore are far less likely to suffer from what the trade calls “shrinkage” – the difference between what you should have and what you do have; the result of shoplifting, employee theft, breakage and paperwork errors.
The result is that as an occasional Argos shopper, I’ve never been let down by one of their branches. If they say they have an item in stock online, then that item has been available when I’ve gone to collect it.
While high street store also have prime retail costs amongst others to bear which online retailers in their out-of-town warehouses don’t, I’ve often thought that even with a small price premium, some consumers would pay for the instant gratification the high street offers alongside the ease of reserving first via the internet (the 21st century equivalent of phoning ahead and getting them to put one aside). But most other businesses seem to find it difficult, if not impossible to cope.
Waterstones, for example, will tell you about the stock of titles by branch. But rather than say that there are 5 copies of a particular book in stock, they just give a general high/medium/low indicator with disclaimers should you be making a special effort to visit a branch. That’s because many non-bestselling titles may only have one or two copies on shelves. And while they should be simple to find, they might have been misfiled on the shelves.
A couple of days ago in an HMV I watched as someone picked up a couple of DVDs from the science fiction shelves, and then put them down less than thirty seconds later amongst the keep fit DVDs. Why? I couldn’t say. But it’ll be down to an HMV employee to refile them correctly. Doctor Who fans will not be looking in the section carrying Davina McCall workout videos.
The white goods retailers are more able to cope with click and reserve since many of their products only have display examples in the showroom, with actual products delivered from an adjacent warehouse – inventory can be kept in check more easily. And yet, I’ve still had some hit and miss experiences.
Recently I reserved an internet connected DAB radio at a branch of Comet. I turned up later to collect it, and was somewhat disappointed that instead of collecting the item from a shelf of previously reserved items, the assistant instead went onto the shopfloor and picked the item himself. While I was satisfied with product, it did occur to me that had stock been low, I might have been left unsatisfied.
That’s what happened to me today when I visited one of those new branches of PC World/Currys. I’d reserved a router and had been informed it was in stock and ready for collection an hour later. I suppose the lack of a confirmation email should have concerned me (Argos is very good at that, as well as sending texts). But when I arrived several hours later, there was no sign of the router. Furthermore, a search of the shelves revealed none. While there may have been a run on routers today, I’m not convinced. I’d made a trip to the store and now wondering why on earth I hadn’t just gone to Amazon and waited a day.
Fortunately they did locate another branch with supplies, and where an assistant was much more helpful locating the router quickly and efficiently. Incidentally, it is worth using PC World/Currys click and reserve scheme if you’re shopping there, since you often pay less than the ticket price in-store.
Maybe I’m just unlucky, but retailers really do need to up their game if they’re going to compete against the internet. While I do an awful lot of shopping online, the in-store retail environment is generally much better for businesses. I find items I didn’t actually go in looking for, and I can be up-sold more easily. Even those awful extended warranties are easier to sell. Not to me, mind you. I wouldn’t touch one with a bargepole. And in some stores there are some excellent bargains to be had right at the end of the month. Like all sales environment, there are monthly targets to be met – worth remembering next time you’re buying a big-ticket item and want to negotiate à la Dominic Littlewood.
How does the High Street compete with the Internet?