Unhappy shoppers

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It seems as though no matter what retailers do right now, the Australian public is not happy.

I recently read an article on News.com.au about retailers trying to encourage people to spend at the Boxing Day sales. In the comments section below, people were talking about how ripped off the poor average Aussie is and how tough they’re doing it while retailers and high earning white collar people are lapping it up. What I don’t think many people realize is that unlike America, Australia’s labour market is no where near as cheap and therefore as competitive. Cheap labour in America means mark-up does not need to be as high and when you add in that a large amount of goods are manufactured in the US or in China (and it’s relatively cheap to import to the US from China) it really helps keep the cost of goods down.

In Australia, we have a higher minimum wage, therefore in order to cover all your expenses (including import cost which is usually more expensive for Australia because we’re relatively far away from most other developed countries) mark up if often higher and goods are not as competitive compared to the US.

I don’t much of the public realizes this and when they complain about the price of our goods and encourage buying online from overseas companies, I don’t think they realize they’re making the situation worse in a way. It’s the little things that often count the most and the continual trend of shoppers buying online will eventually send some retailers broke. Even buying online from Australia companies is bad in a way. Online stores don’t need as many staff and can be more efficient at their job simply because they are not dealing with customers face to face. Online stores can offer goods cheaper because they can often buy a good in bulk and then distribute it for a cheap retail price due to their lack of expenses (lower staff costs, no cost of attractive fixtures and fittings, lower rent etc).

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Unfortunately some local retailers might be slow on picking up on the fact that they need to prove their worth to the public instead of sitting around in their empty stores pulling sad faces. Eventually even the big boys will realize they need to offer exception customer—the one thing online stores can only offer in a certain way. In one of the last stores I worked in we were encouraged to suggest things to customers that they might like or look good on them. More often than not they appreciated it and bought what you suggested. They would start coming in last minute needing a dress for an event that night knowing we could pick something off the rack for them that would be both appropriate and flattering. It’s something chain stores need to encourage their staff to do. And not just, pick the news shirt and show it to everyone. People will only appreciate you up selling them if it’s something in their taste. You just about need to analyze your customer’s outfit and mannerisms upon entering the store in order to work out their style and even socio-economic background before you lead them to something they’ll dislike. Get it right once and they’ll keep coming back. Get it wrong too many times and they’ll never respect your opinion.

As someone who has always worked in retail yet understand a bargain I know saying this won’t change many people’s habits. I do recommend however that you remain loyal to the stores you love most and who provide you great customer service. It might be your local boutique, it might be a good branch of a franchise or chain store—whatever it is remain loyal to them and both of you will benefit in the long run!

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2 thoughts on “Unhappy shoppers

  1. I worked in retail for several years in a major trusted Australian consumer electronics chain, part of a corporation which is regularly criticized for its greed. We operated three stores in the local area, with an approximate population of 200000. One of which was until last year operating in the same location for 27 years with a well trusted, expert staff which had been working for company for many years – we had also established a great trusted presence at two other locations since.

    I worked for the chain for close to 5 years, and rarely found a time when any of the stores weren’t filled with customers – and turning over dozens of large sales an hour. The average revenue in a week for the largest of these stores was in excess of $200000, the other stores were smaller and had a proportionately large revenue. Now, for some reason people seem to think that consumer electronics retailers have massive markup – that is simply not the case, to compete it is not possible to have any significant markup on items – The average PROFIT of a store was between 10-15% – The average sale profit of items in excess of $1000 was less than 5%.

    When it comes down to it – in the five years I was working for the chain not once was there a month where one of these stores generated a profit. By the time rent, electricity, wages, insurance and other maintenance costs were covered the store was running at a loss. This eventually cost jobs and one of the stores was closed. The rest of the company is little different and the business primarily relies upon its online income, and the income from a few large stores to support the rest of the business – but not enough to turn any of these significant incomes which customers so lovingly refer.

    OECD statistics show Australia is, and remains to be one of the most financially equitable nations in the world. It is certainly true that there are those within this country who earn excessive amounts of money – but rarely is that money coming directly from consumers in retail stores. Consumers need to sit back and realize that they are probably some of the best-off consumers in the world and that it is rarely the greed of retail companies that are the problem.

    • Crazy that they had such a small mark-up and people still weren’t happy!

      A lot of clothes stores sell at RRP, which is often double the wholesale price, but customers aren’t happy and say they can’t afford to pay so much. Well we can’t afford to lose our jobs from providing them goods at cost. It seems like everyone is thinking about their own wallet instead of the bigger long run picture.

      Maybe one day we’ll have to buy straight from the manufacturer because the public won’t be happy about paying money to the supposed “greedy” middle man.

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