What Exactly Is The Price?

It has been a hot topic of recent amongst my friends as to how and why they shop the internet. Just today a close friend said that he went to a retailer to price a clothes line. The shop was asking $240.00. He went online and within 40 minutes considered himself an expert on the matter of clothes lines and which ones worked better for various applications. He then found a website he liked and bought a better quality clothes line with 3 times the warranty for half the price to be delivered the next day. Such is the nature of the internet. Everybody is trying to get to the source and remove all the middle men. The shop that he might have bought the product from has high street retail rent prices, Australian wages, electricity, internet, insurances and so many hidden costs that there is not a chance on God's Green Earth that they can sell it for less than $240.00 and make ends meet. It is the same that is going on everywhere. You see 70% off from one website selling down last season stock, another claims to be making the product straight from the factory where the guy who is selling it for 70% off got it from and he is asking 50% less than the other guy's original RRP... And so the consumer juggles numbers around in their head.

Everything in retail world is at sixes and sevens. 

Unless you are selling a globally marketable product like an iPad with regulated prices, or you are Adobe selling software across the world from your website platform, I don't know how people are going to survive trying to retail. Plus, the retailers are dealing with very antsy customers who are getting whatever they want, whenever they want it whilst considering themselves as authorities on the matter throughout the process (see example above). Empowered by internet knowledge and hungry competition, they walk into a store and try on a suit, then go to the internet and scour the world to see if anyone is offering it at a better price. They come onto your website and ask for a discount if they buy two or more items, then go back to the retailers and see what they will do. When they see a discount they think this is the true price of the goods and don't want to pay a penny more and won't shop again until the retailer drops his pants. But, on the flip side, they might decide one day to walk into a store and when the sales guy gives him good service, they buy 3 times as much without so much as blinking.

Which brings me to my point - if retail is to survive it requires collusion in the market place, the precise thing that the internet was supposed to thwart which is why Adobe is probably on the right track and luxury French brands probably are too. The rest of us are stuck in a giant consumer sandwich getting eaten alive every day.

One little funny point I made to my good friend today as he told me about his clothes line was:

"The internet allows people to watch and wait on products 24 hours a day, seven days a week. Do you recall when we were younger that if you walked into a nice store, you felt almost obliged to buy something or otherwise you better leave the store and stop wasting the staff's time? Do you remember? I remember walking in somewhere and you swore to yourself you weren't going to buy a single thing and then you got so scared the item wouldn't be there tomorrow, with no chance to reference it anywhere else on the internet, so you bought it and walked out of the store thinking 'hell, they did it to me again. I swore I'd never buy another thing'. They were the glory days of retail. How sad they are gone."