The Educated Consumer

This is number seventeen  (we’re almost done) in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s fifth Challenge (opportunity), "transparency of price and product information."

Price transparency and the proliferation of product
information are two sides of the same coin. Today’s consumers have more knowledge than ever before. This can be a good thing or a bad thing,
depending on how you handle it.

The days of hiding behind “manufacturer’s list price” are
pretty much over. With just a few mouse
clicks, any consumer can find out what a product is actually selling for, not
just across town, but across the country. Armed with this knowledge, she’s is in a much better bargaining position
than she was just a few years ago. Even
if a manufacturer doesn’t allow sales on the web, there are a variety of chat
rooms, blogs, forums, and other internet sites where consumers can discuss
price among themselves.

While all of this pricing information might tend to drive
retail prices (and profit margins) down, the availability of lots of product
information should have the opposite effect. The same customer who has taken the time to research price most likely
has researched product specs as well. Information on manufacturers’ web sites and on product comparison sites,
along with discussions on those social sites mentioned above, make today’s
customer very knowledgeable about features and benefits. A favorable product mention on a popular blog,
or in a chat room, will drive customers into your store looking for that item. That’s why it’s important for today’s
retailer to know what’s happening on the web. Obviously, a negative mention will have the opposite effect. (See the sidebar item below.)

This presents the retailer with two different
challenges. One is putting knowledgeable
staff on the sales floor. If a potential
customer thinks she knows more about the product than your sales people do, you
will soon have zero credibility.

Assuming you have the right people on the floor, then the task
is to sell the product-knowledgeable consumer on the benefits of buying from you.  This consumer already has a good idea of what
she wants and how much it costs. Your
job is to convince her to buy it from you and to explain the benefits of being
your customer.

 

Sidebar

In today’s information age, it’s critical that you know what
people are saying about you, your products, and your competitors. There are web sites, like Google Alerts,
where you can set up news searches on particular words and phrases. When one of your search terms appears in a
news story, on a web site, or on a blog, you receive an email with a link.

For example, I have Google searches set up for all of our
products and our major competitors’ products, too. Today I received an email alerting me to a
blog entry concerning one of our competitors. Out of respect for the company (they make good products) and knowing that every story has two
sides, I’ll call them “Brand X”. The headline of the article? “I
Hate Brand X!”

He goes on at great length to describe the problems he’s had
with his dealer and the apparent indifference of the manufacturer. To make matters worse, he gives us an update,
quoting the email he just got from the manufacturer, telling him to go back to
the dealer to spend more money to get the needed product correction. He ends by comparing the company unfavorably
to Microsoft! Ouch!

Hopefully someone from Brand X will see this and get it
taken care of before the story spreads all over the internet. But it’s a good example of why we all need to
be aware of what’s being said, good and bad, about us on the internet.

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