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Monday, January 31, 2011

The service retailers provide

Sarah Mahoney is a writer for Media Post Marketing Daily, and she posed a great set of questions to Rafi Mohammed, who recently suggested that retailers with bricks and mortar stores should get a lower price from manufacturers than their online-only counterparts. Click here to read the story in today’s Marketing Daily.

Mohammed is the author of The 1% Windfall: How Successful Companies Use Price to Profit and Grow.

Implications: Interesting idea. But is the only way to compete with online purveyors to pay less for product than they do? Or could the retailer convince consumers that their price is actually worth more? (Or is there a balancing act where both approaches can work together?)

I shopped for a technical item this weekend, and found the sales floor help knew less about the item than I did. In that case, the retailer has added little value to my purchase… except that I could walk out of the store with the product in-hand, at that moment.

Think like a consumer: What makes you glad a purchase was made in a local marketplace, rather than from an online merchant? It is service, support, product knowledge, immediacy of access… or something else? How do you/will you communicate that value to your customers? (Can you afford to take their awareness for granted?)

Mike Anderson

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