Australian store implements $5 cover charge to combat showrooming

By Shawn Knight
Mar 28, 2013
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  1. Here’s an interesting approach to try and curb showrooming: charge customers $5 for looking around in your store. That’s exactly what one specialty foods store in Brisbane, Australia, is doing to try and stop people from just “looking around” according...

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  2. yRaz

    yRaz TechSpot Booster Posts: 768   +47

    I feel bad for Australia, now they have to pay to overpay for things....
    ghasmanjr, SalaSSin and Renrew like this.
  3. psycros

    psycros TechSpot Booster Posts: 616   +185

    Good way to drive yourself out of business. What's truly ironic is that in some cases these stores are right about only charging a few bucks more than online prices (this isn't just an AU problem, obviously). The problem is that 90% of the time when I find something in a retail store that's actually reasonably priced, they don't have it in stock. This happens far less often with online retailers and you always know if their out of something before you try to buy it. Even worse, the online guys are usually more knowledgeable about their inventory than the brick and mortar places are (cough*Bestbuy*cough). These stores don't seem to understand that customers will gladly pay a little more - I'd say 15-20% depending on the market - to be able to walk out the door with something and have a local place to return goods if something doesn't work out. They'll be even more likely to buy if the employees can supply good, objective information to aid purchasing decisions.
  4. MilwaukeeMike

    MilwaukeeMike TechSpot Evangelist Posts: 1,889   +609

    Not if they buy online. And in the store they pay $5 and then get it back. So it's the same there too... the whole idea is to match prices to online retailers, so the prices in the store should go down. That's the whole point, they'll pay less.

    I think this a cool idea. With a cover charge you'll have fewer people in the stores, which means fewer employees needed, so you'll save money there too. Once in a store the customer will be more likely to buy something small like a CD because they'll get their $5 back.

    Will it hurt overall business? Maybe, but if it does, they'll drop it. If everyone does it, it may become standard. Right now we compare brick and mortar stores to online based on price. But what if the price were equal, then we'd be comparing based on convenience and that's where real stores win. If you're spending $1000 on a TV, who cares if you spend $5 to see all the TVs first. You get it back if you buy anyway.

    I'd want my $5 back though if the item I wanted was out of stock, and personally, I wish them luck with this one. I'd just buy online unless it was clear the store had an equal price.
  5. Tygerstrike

    Tygerstrike TechSpot Enthusiast Posts: 827   +93

    psycros
    See the problem is two fold with your argument. First part, most businesses are lucky to get 1 or 2 of whatever item. I never blame the brick and mortar store for them being out of something. In the grand scheme of the universe, someone else arrived before me and purchased the item. The store is simply out of stock. Most retailers will gladly rain check a item if they are out of stock.
    Second part: Something has to be done. Ppl are cheap. They no longer have the income to make extravagant purchases. They watch every penny. The ppl who make the prices ppl have to pay for merchandise get paid well above the avaerage consumer. That being said, ppl have to understand how they are hurting a business by being a showroom consumer. Businesses that employ ppl in your very own city/town need that ACTUAL business to keep their doors open. So if someone wants to be a showrrom consumer, they need to understand that they are killing jobs. Businesses are in business to make PROFIT. Profit that pays rent, paychecks, and keeps the doors open. But ppl wont realize this untill its too late. They will happily go in and pick the brain of an associate, who has done theiir due diligence in learning a product, smiled and greeted them and attempt to make a sale. All the while knowing that they have no intention of buying anything and that associate is just wasteing their very valuable time assisting someone with no possible gain. That person isnt going to come back and buy something from that physical location. All that customer service wasted. The real customers are the ones that get the shaft. They actually want to buy something, but some ******* who isnt, wasnt, and never had any intention of buying anything is taking their time up.
    My point is this. If your going to be that type of customer who does nothing but showcase in brick and mortar stores, Dont. Stay the hell at home. Dont support your local businesses. I could care less. But dont waste my time when there are actual customers who DO need help. Who DO want to buy from a brick store. And who DO value the interaction with an associate.
  6. Timonius

    Timonius TechSpot Booster Posts: 565   +30

    I find the premise that the average, minimum wage, staff of a brick and mortar store is somehow an 'expert' or really cares to know the ins and outs of all the products they carry. Maybe a select few of them. To the rest it's just a job.

    Smile, please don't steal our stuff, please don't abuse me verbally/mentally.
    Smile, ask questions but don't demand Phd answers (even if I might actually have one).
    Smile, let me serve you, but I'm not your slave.

    Showrooming is a tricky thing to deal with. I don't agree with the cover charge idea. Whenever I 'showroom' it is usually part of intense research before I make my final decision. A cover charge might actually influence me to make my purchase elsewhere. What happens when a customer goes into such a store for a specific product which is out of stock? Are they going to penalize a customer (by cover charge) for this? Nope, not happening to me.

    *April Fool's Insurance*
  7. oberonqa

    oberonqa Newcomer, in training

    I agree with this 120% The worst thing for me, as a salesman, is that I can recognize when someone is just picking my brain for information about a product they intend to buy elsewhere (be it online or at a competitor brick-and-morter store). Sadly, I can do nothing to stop it. If I don't give the showrooming customer the same level of service I give other customers, then I run the risk of getting a customer complaint filed against me.

    So, from a salesman's point of a view, it's a no-win scenario. Oh sure, I can point out the benefits of purchasing from me as opposed to going online to buy it, but the rebuttal "I can get it cheaper elsewhere" puts me right in my place... because I cannot dispute that. Sad thing is, most of the time, "cheaper elsewhere" translates into $5-$10 cheaper... and that's before shipping charges. And even that I can build a case against, as I have made purchases online and free shipping does not equal PROMPT shipping. I purchased a computer part from Newegg once and used the Egg Saver shipping... and the darn thing took a week and a half to get delivered to me. And I only live 400 miles away from Newegg's distribution facility. When I called and asked them why the delay, they were happy to explain to me that when a customer opts for free shipping, they are basically telling the company the order isn't time sensitive and therefore is OK with a slow turn around. But when I use that real world example as a rebuttal to customers that point out they don't pay shipping charges, I get an earful about how everything they order online always arrives within 2-3 days and therefore I must be talking out of my rse.

    Moral of the story here: people are cheap... either by necessity or by choice... they are cheap. But people also want to make informed purchasing decisions when they are looking to buy something and, for now at least, the best way to make an informed purchasing decision is to see the product in person and talk to people that are knowledgeable and can provide dynamic feedback and commentary on said product. And that is something that online retailers just can't match (despite making great strides such as rating systems and feedback tools)... it's just a shame that so much business goes to the online retailer that should have gone to the brick-and-morter store that already spent face time with the customer prior to the purchase.

    To the store in Australia: great idea! I can only hope that more stores and companies implement a similar policy. After all, information may be free, but salesmen and the information they impart to customers isn't free.
  8. Benny26

    Benny26 TechSpot Paladin Posts: 1,568   +47

    So if I go into this place hoping to buy a Pepsi, but find out they don't stock Pepsi, It's going to cost me $5 to know that they don't stock Pepsi.

    There's something not right about that.
  9. wantToKnow

    wantToKnow Newcomer, in training

    Apple is opening more and more stores and people don't have to pay for showrooming and all of us know how Apple is doing in the business. The same goes for Walmat and many more companies, so what else can I say?
  10. RH00D

    RH00D TechSpot Booster Posts: 374   +73

    And what exactly are they going to do when you go into the store with no money on you? This has to be the worst thing they could have possibly done. Here's an idea, if you want people to buy stuff from your store and not online then make the customer experience far better than what you can get online. People will buy from your store if the experience is genuinely superior to what they can get online, even if the online prices are a tad cheaper.

    That, or they could also step up their online shopping experience to compete with other online-only retailers.

    Even further, just getting people to step inside your store a huge marketing opportunity because once they are IN the store, there is so much potential to sell them something or even just give them a good experience even if they don't buy anything. This just deters people from even entering your store in the first place.

    I would rather have a lot of people in my store not buying a lot, than not a lot of people in my store not buying a lot...
  11. Buster Keaton

    Buster Keaton Newcomer, in training Posts: 19

    My response? Dear Store, as of the first of February, I will NEVER come into your store again. Thank you very much, have a good day with your terribly misguided attempt to "combat" showrooming.
  12. 5 bucks just to come into your store and look around? This is going to go over about as well as a turd in a punch bowl. Want me to buy from your store? Give me better customer service. Give me no questions asked 30 day return policy. Keep your prices low enough that the sales tax does not persuade me to buy online. Don't try and rip me off with 100 dollar cables. (Best buy) Can't do that? Get in that long line with the dinosaurs, the carrier pigeon and the dodo bird. Want to charge me 5 bucks for nothing? Go *uck yourself. I will never buy from you. Never!
  13. This is just a pub stunt. They have won the pub war. everyone knows who they are and where they are. Of course they aren't going to charge people for entering their store. Its got gimmick written all over it. And you saps ate it all up, like the slow wit's they took you for! They are going to make millions from this, and it'll be YOUR millions. Showrooming .. that word wont last long.
  14. TorturedChaos

    TorturedChaos TechSpot Chancellor Posts: 843   +11

    From a small business owner's standpoint I think this is a terrible idea.
    In fact, I was just disusing the issue of more or less "show rooming" with an employee yesterday.
    We carry professional grade, construction laser levels - both rotating and fixed beam. A new self-leveling rotary laser level isn't cheap, at least not the pro grade ones. (If you want a cheap one - go to Home Depot or Lowes, just don't come crying to me when it breaks or doesn't reliably read level.)
    Anyways, he was very frustrated with people just looking at the laser levels, and picking his brain about them, then not buying anything because our are too expensive (they are price right in line with MSRP, and many times we have a lower markup on laser levels then the store minimum is) or they are over kill for what they do. He want to put some sort of add out implying we server professionals only.
    I told him that I do not want to alienate customers, even if they do not buy something today. We offer a lot more then just laser levels, and we may not be able to help them with a laser level that fits their needs today (a guy remolding his kitchen doesn't need a $2000 digital grade laser), but we may be able to help him in the future with something else, or help someone he knows. If we are helpful and friendly today, there is a better chance they will come back for other items we can help them with in the future.

    So more back on topic, if your business is needing to do something like this - you have a major problem. Don't punish your customers for your lack of ability to change with the times.
     
  15. Tygerstrike

    Tygerstrike TechSpot Enthusiast Posts: 827   +93

    @Tort
    Where I agree with you philosophy in general principal. I disagree that a better customer service will affect you later. Most ppl just see that level of customer service and think that a associate is simply trying to kiss *** and make a sale. I have had my share of "lookers". I deal with cellphones. Many times we get ppl who come into my store simply to pick our brains then go and order their phone online. Then they expect us to do all the leg work in setting up the device, transfering contacts and pics, and training them on how to use their device. This isnt fair to the customers who have purchased from us. Those are the ones we need to service. These lookers who are too cheap to buy from my store find a very cold reception. I am happy to explain to them that I have customers here in front of me who need actual assistance. I have no trouble ignoring those ppl in favor for those customers that do me the great honor of purchasing from me. They are the kings and queens in my store. The lookers MAY get assistance with their device but only if everyone else is taken care of first. Many times I simply ask them to understand my view point. I explain that these good ppl here in front of me were not only here first but have purchased their devices from me and I have to give them every courtesy and help them get their device setup. If im too busy to assist a looker I explain that they purchased their device online and instructions for setting it up came with the phone. Most of the lookers get mad because I wont stop helping my customers to assist them. Well Im sorry to all those lookers, you get what you pay for. Had they purchased from me I would have treated them like royalty and bent over backwards to meet their every concern.
  16. Renrew

    Renrew TechSpot Enthusiast Posts: 222   +16

    Having spent a number of years owning a Koi and Pond business, I had the same problem. I finally came up with a 200+ page informational web site that I would direct the customer to when a non buying customer tried to take too much of my time.

    Worked like a charm, but took a long time to gather all my knowledge in an easy to understand site.
  17. oberonqa

    oberonqa Newcomer, in training

    TorturedChaos

    I agree with what you have said and it is the driving force behind my customer service standards... but it doesn't make it any less bitter to swallow when I see someone come into my store and tell me they love the product they bought at <x> retailer and thank me for giving them such great information. As a salesman, that irritates me to no end... and drives me absolutely bonkers because I have to sit there and smile and tell them how happy I am for playing a part in their purchasing decision. To do anything else would be to either

    A) Alienate the "customer", which reduces the chances of getting a sale out of them ever again.
    B) Anger the "customer", which reduces the chances of getting a sale out of them ever again... and possibly a customer complaint.
    C) Embarrass the "customer", which reduces the chances of getting a sale out of them ever again... and possibly a customer complaint and reduce the brand image of the company I work for.

    It's a no-win scenario, no matter how you dice it. So I smile and thank them and try to assist them in any way I can, hoping I can somehow get a sale out of them somehow... be it in the form of an accessory for the item they purchased elsewhere or give them ideas/solutions to other problems which would result in an item purchase (read: repeat the whole sales process all over again).

    Customer service is king and like Tygerstrike, I go out of my way to help the customers that come into my store to purchase from me. I have told many a customer that my store is my home, and when you come into my home, your a guest in my home and it's my pleasure to make you feel welcome and see to it that you are taken care of. But when a guest in my home takes advantage of my hospitality, that angers me on a very deep and personal level. I may not be able to show that anger, but well... there are many people across many cultures in the world that have perfected the art of smiling while being angry, never letting on through tone of voice, body language, facial expression, or otherwise that they are angry... only a warm smile and kind words.

    I guess that prevailing mentality is part of what makes me a good salesman. But make no mistake, I don't like showrooming and I despise people that engage in the practice. But like I said at the beginning of this post, I do agree with you. Every person that comes into your store is a potential customer... it's just a shame there's no way aside from charging a cover like the store in this article to discourage the showroomers and instead leave only the potential customers.
  18. Railman

    Railman TechSpot Enthusiast Posts: 443   +57

    It would put off family shopping. Two adults and two children would cost $20 a visit. Wives would not get their husbands to join them shopping if there was a charge. It is a plainly daft idea. Most towns in England are expensive to vist thanks to car parking charges. One more reason not to use shops in town.
  19. Darth Shiv

    Darth Shiv TechSpot Evangelist Posts: 1,086   +154

    *Now*? We always were being overcharged. And the reason we browse then buy elsewhere is because they did it before.
  20. Emexrulsier

    Emexrulsier TechSpot Enthusiast Posts: 184   +6

    This is something I do mainly when buying TVs. You can read all the reviews online but its sometimes good to see the picture quality in person before buying. I pop into my local Currys and see the TV first hand. If Currys introduced such a policy I wouldn't start shopping at Currys, I woudn't enter their store at all so potentially they would loose my custom. You never know I might have entered the store to look at a TV to find it cheaper than the internet, now though I'll never know.


    Exactly what I was thinking
  21. oberonqa

    oberonqa Newcomer, in training

    What if the company put the $5 on a store gift card to be used on a future purchase? That way, showrooming is reduced... and the consumer keeps their money (albeit in the form of a gift card). This would also address the out-of-stock concern, as the cover charge would go right onto a gift card to be used on ANY item in the store.
  22. mojorisin23

    mojorisin23 Newcomer, in training Posts: 55

    As a commentor on Yahoo said:

    "What a great way to combat sales..."
    Darth Shiv likes this.


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