Retail "Showrooming Fee": Interesting & controversial

A lot of store sales are by browser coming in and making impulse decisions. Customers buy things that were not even on their mind when they got out of bed. An admissions fee would cost them a lot of sales IMO as potential impulse buyers would not enter. A better solution would be to give out coupons for say 5% off with a short expiration date.

 

Walmart is probably the worlds most successful retailer. Utilitarian low profit items such as toilet paper,soda, milk, other staples are deliberately put in the back of the store so the customer has to walk through a rat maze of aisles and see impulse items such as clothing, jewelry,etc  to get to what item they came in for. Often the customer walks out with extra items he/she had no intention on buying.  An entrance fee would simply keep people out of the store and sales would be lost. Many other retailers follow this strategy. They often also rearrange the store for the same reasons. They do not want the customer to come in, get a quart of milk and leave without being exposed to other items. 

 

Dale H 

 

Would Allans tax post apply in driving to purchase rather than shipped to you apply here as well? Asked a friend going to a hobby shop last Satruday to look at the Lionel Santa Fe PS-4 flat with trailers. They told him it hadn't shipped yet. Ebay has been loaded with them for a month it seems.

No window shopping there!! :-)

A couple thoughts:

 

1) Regarding the "just looking" - I went to a different hobby shop for the first time a few weeks ago.  I had zero intention of buying anything that day.  Asked by the owner what brought me in, I was honest and said I'm doing a new layout and was getting some ideas.  He didn't blow me off at that point and answered a number of questions.  Well guess what? My "just looking for ideas" gave me some, and I'm going back tomorrow to buy something I saw.  I'll admit I checked the pricing online.  Fortunately I found the LHS was competitive so I don't lose much going back.  So the point is, "just looking" has value even if it's not immediate.

 

2) This thread touches on the issue of the internet killing local hobby shops.  The consensus in this and other threads seems to be that the internet is nothing but bad for the LHS.  At one time I might have agreed, but not anymore.  Like some have touched on previously, a LHS can do well if they can find a way to differentiate themselves and make good use of impulse sales.  But they can also use the internet to their advantage.  In the same LHS trip as I described above, I noticed the shop had Super O track.  It was like new and pristine.  I thought for sure someone must be making knockoffs and asked about it.  Turns out it really was original.  The owner said he actually had a ton of it.  Said it would take him years to sell it all, but he periodically puts some up on eBay and it goes quick.  So there it is, the internet helps the LHS.  All because the owner learned to use it.  I imagine many of the shops to close never even had a website.  Times change and it's not change's fault that some choose not to embrace it. 

Couldn't have said it better. 

 

Using the fishing analogy further, if you work in the retail world, you have to acknowledge that you're always going to get nibbles and no bites in the process of catching that big fish (sales).  That's just part of retail life.

I've talked to over the years who have that same problem with "customers" coming in; taking the dealer's time to "examine" merchandise and ask questions; and then turn around a go buy the item via the Internet.  Gives expanded meaning to the term "bottom feeder" (which I like to use from time to time because it serves as a reminder to those who are, and it's kind of fun to see them vigorously protest).

In a mixed market economy like ours, prices are set in large degree by competition.  How does the brick and mortar store compete with online retailers?  First is price, second is value add, third is immediate access to the product, etc....  Brick and mortar stores simply need to be competitively priced in today's economy and stop attempting to over charge for value adds like service.  Sure service has a cost but many retailers have overvalued their services and in turn overinflated their prices.  I don't think it is "bottom feeding" to shop around.  In fact it is exactly what we are supposed to do in our economic system.  If we all bought based on intrinsic feelings about the places we buy from there would be rampant inflation.  Are you willing to overpay for gasoline because you like the gas station?  How about bread, milk, butter, or other basic needs?  This inflation would be essentially artificial because it would be spurred not by economic forces but by emotional ones.

Scott

With reference to Dale H's comments:  Seven-Eleven's and other quickie markets survive because people do not want to have to go way back into the catacombs of a big box grocery to get milk (without even a Segway provided).  And when people walk in and find the stupid store has played hide and seek with what you wanted in a hurry, you don't find it, and go to their competitor who has not, at least this week, moved all the game pieces.  There was a Kroger grocery store that had the milk and other commonly grabbed items like bread at the front with a separate door and checkout

line.  The geniuses discontinued that and the people I know who shopped there now

shop at Walmart.  However, quickie markets and drugstores, with smaller area to trek, often have milk on sale, and you don't have to hike to Kansas to get it.  Apparently some people will pay a little more to avoid a Cherokee Trail of Tears to get a gallon of milk.  I consider both price and how fast I can get it when shopping for staples.  If

it is hard to get, I am not in the mood to do anything but get out of there as soon as

possible and am not in the mood to buy.

Interesting coincidence, camera stores and staying in business with internet competition.

A few weeks ago my camera broke and since I'm not across the bridge from Delaware, I searched the internet for a brick and mortar camera store here in the Tampa area.  

Long story short, I found what I was looking for, had a live salesperson that looked up the best current online price and matched it.  He also explained they had a 15 day price protection plan in which today, the price dropped $70 more.

I guess that's what Best Buy is doing to stay in the camera business.  It works for me.

 

I guess I gave the Aussies more credit than to do something that dumb and shortsighted. 

As for sales tax, I think that anyone who advocates the payment of more taxes should post their address here so that we can all send them our tax bills.

The dilemma that Hobby and Camera brick and mortar retailers face is a complex one.  Judging from my experiences on the Buy/Sell board here I think most of the folks on this forum want to pay the lowest price possible for what they buy, and they want to avoid paying for shipping (forget about salestax).  Based on that, it would suggest that many, if not most train purchases made by our fellow forumites are made via the Internet unless the LHS is having a blowout sale. That is a fact of life that the brick and mortar retailer has to find a way to deal with in order to survive.  It's kind of like the survival of the fittest. I think the vast majority of the folks here are interested in the survival and growth of our hobby.  The question is how much each of us is willing and/or able to pay to achieve those goals.  I don't presume to judge anyone based on their answer to the above question.

Phil

After reading this, I want to see that PBS MASTERPIECE show this Sunday concerning the guy who brought the department store concept to the UK.  In one way, it sounds as if Macy's meets DOWNTON ABBEY.  But in another, it is the idea that not just the item, but the PRESENTATION of the item is what sells.

 

LHS nned to bring back, or introduce that sizzle along with the stake.

So what's a LHS to do about being a showroom for online shoppers? I assume most can't meet lower prices found online. I don't think the $5 fee is an answer.

They absolutely can.  They choose not too because they have over valued their value add.  Just a small example:

LHS has a set of 4 RMT NYC Peeps in the showcase.  The price is $391 for the 4.  They know darn well that anyone can purchase those 4 cars for under $100 online but they refuse to lower the price.  They are waiting for someone who is uninformed to come along and fall in love with them at $391.

 

What can they do?  Become a destination!  Earn the extra markup by providing more than a building and inventory.  Be competitive on price.  Online retailers still have to factor in shipping which raises their total price per item.  LHS can use that advantage but they seem to be stuck in some 1950s "mom and pop" mode with uncompetitive prices to boot.  Price match!  Compete online as well as in person.

 

Scott

As srook already said in response (and I said a day or two ago) LHSs can compete.  The model has just changed.  They'll lose out if they charge pre internet prices and provide pre internet service.  They need to look at ways to provide value and recoup margain.

 

I'm not going to lay out a business plan here, but success can be had if they adapt and change.  It's no different than another buisness.  We are just in a hobby which glorifies an era 50 years ago and those who support it need to know the methods of 50 years ago won't fly even if the nostalgia does.

There's an old joke about a guy wanting the same discount from his LHS as a big mail order dealer (pre-internet days...)

 

After some haggling, the shop owner eventually matched the mail order price for the customer and he then paid for it.

 

The shop owner then put the item back on the shelf.

 

Supprised, the customer asked the shop owner why he put the item back, the owner said: "You can pick it up in 3 days."

 

Rusty