Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Retailer greediness can give a business (and a brand) a bad name

Mark Fletcher
May 27th, 2017 · 16 Comments

I was contacted through Facebook yesterday by a shopper complaining that an item sold online by newsXpress for $9.99 was being sold for $12.95 in a local newsXpress store.

My research revealed that it was not a newsXpress store with the item at the 29.62% higher than online price. So I went back to the customer.

Today’s shoppers re connected and astute. Price checking has never been easier. Thinking you can get away with a higher than suggested retail price because of a regional or rural location reflects an ignorance. Ultimately, such practices will hurt the businesses that charge too much.

In this situation from yesterday, the shopper had such a terrific experience they have told others. People who love brands tend to belong to groups online, where they talk with each other.

I engaged in this online chat to mitigate any damage that may have been done by a newsXpress member charging too much. From the outset I was prepared to give away the $9.99 product to make it right. It turned out that doing that pitch he newsXpress brand differently to another, and this has had a ripple effect.

On any given day I am involved in ten or more discussions online with people looking for different products we sell. While most discussions do not result in an obvious purchase, each is equally important in representing the banner brand as engaged, customer focussed and ever present online.

Online is a vital part of business today, and will only increase.

Newsagents who are not engaged online are missing out. groups that do not actively encourage pricing uniformity will also miss out.

Yes, there are some newsXpress retailers who will sell some online promoted items in-store at a higher price. While I have no control over it, I do encourage pricing consistency with online pricing for members of the banner group.

Note: I have obscured the location and the banner name of the business as that group its quick to involve lawyers, and this not is not actually about them.

19 likes

Category: Ethics · Social responsibility

16 responses so far ↓

  • 1 Colin // May 27, 2017 at 1:53 PM

    Good stuff ! I wonder how the other newagency banners would have reacted, if they were contactable of course !!

    Selling on internet is too often a race to the bottom. Same item available on Ebay for $8.25. Our stance is to avoid those products that permit/encourage internet only operators. It’s hard, but avoids the tyre kickers who subsequently buy on line.

    0 likes

  • 2 Mark Fletcher // May 27, 2017 at 3:57 PM

    We sit at SRP and offer exclusive value in return for loyalty. Online only is here to stay. The key to online is being online when shopper are.

    0 likes

  • 3 Lance // May 27, 2017 at 5:20 PM

    “”The key to online is being online when shopper are.””

    Good point Mark.
    This is proven with the likes of Ebay.
    We often list items and have 3 or 4 watchers with no bids.
    Relist the item and you may have 15 or 20 watchers and sell for a good price.

    It all depends on who is shopping, and what they’re shopping for.
    Make the offer attractive in a unique way and you will sell.

    0 likes

  • 4 Lance // May 27, 2017 at 5:22 PM

    EDIT>>>>>
    My Ebay comments above are not directly related to the Newsagency channel.
    We just sell ‘stuff’ from home.

    0 likes

  • 5 Chris // May 29, 2017 at 4:52 PM

    How can you say shame on them! Do you know their situation? Do you know what prices they need to charge to cover their costs? Yes their beanie boos may be $12.95 but another product they stock may by 50% cheaper than yours. I am disappointed that you are taking a cheap shot at another newsagent to try and get brownie points for your brand. Haven’t you mentioned before that we are only as strong as our weakest link yet here you are actively devaluing another store.
    It was a great opportunity to strengthen your brand but you did not have to do it at the expense of a store that you have no understanding of.

    6 likes

  • 6 Mark Fletcher // May 29, 2017 at 4:58 PM

    Yes, Chris, I do know their situation, very well. Their mark-up for this product is consistent with their broader mark-up policy. The only discounting is at the end of a line when they have little of an item left.

    I’ve not sought a brownie point for any brand in this post. What I wrote was necessary for context.

    This post explains the risk to a business of a price gouging policy. That is not me talking, it is customers. Yes, that is my core point.

    2 likes

  • 7 Eric // May 30, 2017 at 7:53 AM

    The same happens in other brand newsagents but be realistic. I don’t know where the newsagent targeted is but as a rural newsagent, I have more and different expenses than some others, so have to mark up accordingly.

    2 likes

  • 8 Mark Fletcher // May 30, 2017 at 8:06 AM

    Eric I am curious about your different expenses. I can imaging freight might be a different expense. I’m in a shopping centre and have the mandatory marketing fund for the centre and other overheads that amount to $25K a year.

    My point is, we all have different expenses.

    In today’s connected world shoppers have more power than ever and greater ease to price compare than ever. Price as you must – but be ready for the consequences of charging at 30% above SRP. Customers will fight back.

    0 likes

  • 9 andy // May 30, 2017 at 8:19 AM

    Hi Mark
    what about increaing your gp?
    we have enough items which are fixed price i dont see a problem

    1 likes

  • 10 Mark Fletcher // May 30, 2017 at 8:23 AM

    Andy that is what this newsagent has done and there is nothing wrong with that. However, in this connected world the consequences are greater and faster.

    Retail has fundamentally changed. How we act as owners of retail businesses should have fundamentally changed.

    My post is not designed to say don’t do this or that. rather, it is about there being consequences if you decide to price a well-known branded item at 30% above SRP. Shoppers talk.

    0 likes

  • 11 Paul // May 30, 2017 at 3:26 PM

    You say – Yes, there are some newsXpress retailers who will sell some online promoted items in-store at a higher price
    then in your response to her about this item – Shame on them selling at that price
    Does that go for the newsxpress stores which sell for higher than you think they should

    1 likes

  • 12 Mark Fletcher // May 30, 2017 at 3:38 PM

    Paul don’t expect me to do what you might do. Of course I would and do tell newsXpress members to not price gouge.

    What is sad about your comment is that you focus on this and not the core reason for the post. Your loss.

    0 likes

  • 13 Paul // May 30, 2017 at 3:43 PM

    Just agreeing in general of what Chris said and what might i do ??

    2 likes

  • 14 Mark Fletcher // May 30, 2017 at 4:18 PM

    Paul your question asks me what I do re newsXpress members. I think you ask me because if you were me you would say one thing here and do something elsewhere. I don’t do that. I am consistent, even if people don’t like it.

    As to Chris’ comment – I answered that in full.

    Again, all this misses the point of the post.

    0 likes

  • 15 Paul // May 30, 2017 at 4:32 PM

    if you were me you would say one thing here and do something elsewhere
    Wow, you really dont know me do you
    Glad we sorted that out

    1 likes

  • 16 Mark Fletcher // May 30, 2017 at 6:38 PM

    See what I mean Paul, you don’t know me. I am glad you realise that.

    0 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image