Sunday 25 September 2016

How the online retailing debate bowled over Australia’s Ashes campaign (no, really it did)

Were it not for the cricket score, the recent retail furore probably wouldn’t have been nearly as interesting. Be honest – would you rather tweet your complaints about GST, or your typical Australian throat-crushing bad sportsmanship about how we’ve given the Poms yet another flogging? Thought so.

 

But since we haven’t had that luxury, we’ve had to resort to watching another kind of battle. Bricks and mortar (B&M if you’re keeping your tweet characters down) vs. online retailing. Even Spartacus never faced such a challenge.

 

Sadly, one suspects that the Australian top order was unfairly distracted by the retail war, and England rightly exploited an opportunity to give us a lesson of the highest order.

 

Personally, I think the whole thing has been a strategic campaign waged by the English, specifically for the purpose we’ll be witnessing in about 3 hours’ time (our final capitulation and a 3-1 defeat). My reasoning? Because back in Ye Olde Motherland(e), where I’ve just spent the past two years freezing to death and lamenting the 2009 Ashes defeat, they’ve already gone around the houses on the online vs. B&M retailing debate more times than our scorers have needed to count to.

 

For those with their fingers on the marketing media pulse, you probably remember last year’s sledging war between UK online retailer Dixons and the big department stores. Dixons broke a big taboo by actively encouraging shoppers to head into their favourite department stores to research purchase decisions, before going home, jumping online and making a massive saving by ordering off a website.

 

Online retailers have far lower overheads, so naturally it makes sense that their margins (and hence sticker prices) are going to be lower. This is not rocket science.

 

Here are some examples of the tube ads run by Dixons in 2009/10:

 


 

Subtext: I may pride myself on being paid an above-average wage, I probably holiday in the South of France, and when I leave my current job and someone asks what I want for a farewell gift I’ll sheepishly say “Oh, just some Selfridges vouchers”. But in the comfort and secrecy of my own home, if I’m going to fork over £500+ for a new telly, I want the biggest one I can get for the lowest price.


 

Subtext: Napoleon was right when he said England is a nation of shopkeepers, and since I’m not really an early adopter of technology I would really appreciate someone who knows a bit more than me helping me to find the right TV. Of course, there’s a financial crisis on, we’re not sure what the economy’s doing and it wouldn’t be responsible for me to be shopping at a premium department store when I can get exactly the same thing cheaper somewhere else. I feel a bit bad about wasting the young man’s time, but the guilt will pass as soon as I watch that lovely Frank Lampard punt a screamer into the back of the net from 30 yards out.

 


 

Subtext: It’s cheaper somewhere else and I don’t have to climb any stairs to get it.

 

Clearly, England (the whole country is in on it) realised that such a debate can divide a nation, and obviously all the evidence points towards a strategic wedge campaign aimed at creating turmoil amongst us Australians in a manner we’ve not previously experienced. So to that effort, I dips me lid.

 

Interestingly though, the local debate has paid very little attention to the remarkably empirical argument of cost. So here’s a particularly clear example.

 

In 2010 I bought a pair of Prada Sport sunglasses (yes, I know, I need a stern talking to, but I’ve never been able to afford designer glasses before so I splashed out – sue me). They look like this (from Vision Direct):


Hot, right?

 

Now, leaving aside the relative value of importing (in this case the overseas price is the same as the local Vision Direct price so it’s a moot point), here’s the equation – I’ve included links .

 

Vision Direct: $250.95, and they’ll throw in a free $30 lens care kit.

 

Leading local B&M retailer: $440.00, AND I have to go into a store to buy them.

 

I know most of us PR types prefer words to numbers, so let me highlight the price difference of one hundred and eighty-nine dollars and five cents. You know what $189.05 will buy you? Another pair of sunglasses. Or a cricket bat.

 

I have no idea whether or not the $250.95 includes GST, but the thing is, even if that still needs to get added on, I’m still saving more than $150.

 

In fairness, I must point out that my 13” Toshiba notebook was purchased from a B&M John Lewis store in early 2009, assisted by a VERY HELPFUL assistant, AND was about £100 cheaper than the equivalent model online at the time. So online isn’t always cheaper, but that’s where the perception is at, and it’s incumbent on B&M retailers and their communication teams to work out what the compelling reason really is for consumers to continue shopping in store.

 

All that said, there is a silver lining to the whole debate, and one which Australians can and should rally around.

 

Obviously, it’s not Ponting’s fault.

 

Entirely.

 

-Grant

 

Full disclosure – PayPal is a client of Edelman’s, but this post is in no way connected to the work we do with the organisation.

  • Ed Courtenay

    Interesting read Grant! And I will try not to bring up the cricket too much in this comment….Aling these lines I spotted an ebay.com.au advertising poster in Sydney just before Christmas that encouraged people to browse instore and then buy online, citing price savings…Also, on the 7pm Project the other night they covered this retail war and made a good point that Aussie retailers have in the past been more than happy to buy goods from overseas, taking many manufacturing jobs out of the Aussie market…reason = drive costs down! So they should be the first to understand why Aussies are now looking overseas for bargains!But you are right, the UK has been through this already and it weeded out the weak retailers…those that could adapt have survived (RIP Woolies)…the same will happen in Australia and retailers need to revisit their strategies now (or should have already sorted a plan) to ensure they survive, otherwise they are going to struggle…P.S. love the Ashes!

  • grantsmith8

    Ed…nope, I got nothing. Congratulations to England. *chokes on the words*