Protesting online prices: Not an effective customer-winning strategy

Just in the last couple of weeks, there have been many reports that both consumer electronics brands as well as physical retailers like malls, protesting against online retailers offering discounts on products. I find this to be quite amusing and immature. If you haven't been following the news, i am referring to news articles like this one here
(http://www.business-standard.com/article/companies/malls-want-brands-to-end-deep-discounts-online-114022700032_1.html)

While price is a big factor, that drives shoppers to online channels, physical retailers should not get so hung up about cheaper prices being available online. what about assortment, range, availability, customer service and other value-added services and not to forget the all-important sensory experience of shopping in stores/malls? What are physical retailers doing in these areas to attract customers to come to their stores and not go online?

As many surveys and studies have shown, Showrooming is inevitable but retailers need to look beyond that and think of seamless shopping experiences across their physical stores and digital channels, and find ways to address the needs of the consumer. The fact that certain categories have a higher propensity to move online (like electronics, books, music etc) makes it difficult for physical retailers to compete. However, there are plenty of examples of physical retailers competing effectively with online sellers, via innovative solutions that embrace the strengths of both the physical and digital worlds. Nordstrom's clever use of social data (specifically using Pinterest boards) is one such example.

The good news is that, around the world, a vast majority of shopping still happens in the physical store and while online commerce is growing, it is relatively tiny even now. But retailers really need to stop living in denial and accept that online commerce is inevitable and digital technologies are empowering customers like never before and providing unprecedented information at their fingertips. The question is, do physical retailers want to embrace these very technologies to their advantage or not?


Complaining and protesting has not been proven to be an effective strategy to win over customers.

Can Brick and Mortar Consumer Electronics Stores survive for long?

As rapid technology advancements change consumer behavior with respect to their shopping habits, one format that is at the center of this vortex of change is the brick and mortar consumer electronics segment. In fact, the writing has been on the wall for quite some time with the untimely demise of Circuit City a few years ago. I believe the cause of Circuit City's woes and ultimate shutdown had a lot to do with their inability to adapt to the rapidly changing e-commerce market and rising consumer expectations.

In today's world, consumers have tremendous amount of information at their fingertips, esp. when it comes to technology products. From social media to blogs to opinion sites to expert product reviews to videos to price comparison sites, consumers have access to a plethora of sources to research, browse, purchase and receive a product of their choice. So where does this leave traditional brick and mortar retailers selling technology and consumer electronics?

Best Buy's strategy, one of the last surviving retailers in this space, offers some clues. They recently announced that they are tying up with Microsoft to open store-in-stores offering a variety of Microsoft's consumer products. After the success of Apple's retail stores, many brands have followed suit. These new-age stores are big on the experiential factor offering potential buyers a chance to try the devices and gadgets before they buy. They also provide true expert advisers (not sales people!) on site to help answers customer's queries. And finally they make the whole shopping experience a breeze with wireless payment options and other services. Successful brands like Samsung (Smart Cafe) and Google (Android Nation) are embracing an aggressive brick and mortar strategy too. These stores are turning into both experiential destinations such as large flagship stores(again taking cue from the Apple Manhattan store) that make a statement about the brand experience etc but also have smaller stores in partnership with existing smaller retailers that carry a localized portfolio of products, as it may always not be economically feasible to open physical stores across many geographies/cities. 

As there are a handful of brands that dominate each category such as mobile phones etc, I believe the future consumer electronics store will be an amalgamation of exclusive brand stores (like a department store) that are managed by the brand and allows the consumer to provide a real immersive experience into the brand. However, these retailers will also have to be innovative enough to not depend on the brands entirely. Technologies like 3D printing, augmented reality shopping. omnichannel shopping options etc will provide an opportunity to offer unique buying experiences that are tailored to their customers needs and preferences. Lesser known brands and not-so profitable product categories will gradually move to online sites and marketplaces as retailers can neither justify the store space allocated to such categories nor will customers find these brands exciting enough for them to want to actually experience them before they buy.

The age of the big box consumer electronics retailer is nearing an end.