This is a familiar story about a kitchen sink, but therein lies a lesson about a rapidly growing threat to all traditional retailing, fashion garments and accessories included.
We are remodelling our kitchen at home and are going to replace our intensely disliked twin round sinks for a more useful double stainless steel rectangular style. We took ourselves to a Sydney shopping centre where several homemaker stores display and sell sinks.
With the help of an obliging sales lady we found the perfect double rectangular sink. Its recommended retail price was $749. The sales assistant gave us a leaflet with the specifications for the sink and threw in, over her shoulder as we left to recheck our measurements, that if we returned to buy from her she could do better than list price. We could have the sink for $695 plus delivery – unless we were prepared to pick up the sink ourselves.
This set us wondering about the price other retailers might also offer for the same brand and model of sink. We went to the oracle (the internet) and surfed about among sinks. And what did we find? An online supplier with the same sink for $655, delivered. We paid with our credit card and two days later the sink arrived. Clever us.
In hindsight, the whole business worried me. The retailer had set up an excellent display for us to see all the sinks available, and a helpful sales assistant had offered a price discount. But, in the end, the store lost the sale to the internet. If everybody did what we did, the store could not survive unless it stopped customers at the door and refused entry to anybody who did not swear a solemn oath to buy.
The same anti-retail situation is happening in every consumer product category except massage parlours. Mug regular retailers are doing the work for nifty onliners whose only overhead is setting up and maintaining a website.
I used to think that clothing would not be affected because you have to try it on and feel it. Apparently not so, my parental friends tell me. Their kids buy everything they can online and much of it from overseas. Only people whose bodies fall outside standard sizes, or who don’t know their size related to a particular brand, need to try on.
If the images are good enough on the computer screen and the return policy is believable, the internet can scoop more and more sales. The trouble is, those are not add-on sales as far as the garment industry is concerned. They are substitute supplier sales.
I know I’ve rattled on about this before, but during the dreadful winter season we’re trying to leave behind, where nearly all retailers fell in a financial hole, having a growing percentage of their sales stolen by the internet is hardly helpful. I predict some significant retail failures over the coming 12 months as the winter stocks in back rooms simply cannot be sold now and await a price thrashing next winter.
And somewhere in the midst of the mayhem retailers, as a group, are going to either close stores and join the internet stampede or lobby the government to crack down on private, duty-free imports.
My feeling is that, in any case, local shopping in the future will be quite different to the way is now. The internet will, in a sense, win. There will be strategically placed manufacturers’ showrooms where consumers can look at products, feel them and try them on but the business will be done on the internet.
Real bargains may have the pulling power to make people travel to buy but, if it is regular stuff, it will expected to be available online.
If I was Frank Lowy’s great grandson I would be very afraid.
Double Bay quits Double Bay
Poor corporate health is not the reason why Double Bay Warehouse is pulling out of Double Bay. It is more to do with the company owning the freehold of its long-occupied, superbly positioned site and deciding to sell it. No doubt it has found, like most businesses in Double Bay, that the icy shadow of Westfield Bondi Junction has had an adverse effect on retail prospects.
Not so in the other 10 suburban locations of the Double Bay Warehouse, which has been around since 1973. As close-out champions, the store group pre-existed, by a long way, the growth of factory retail outlets and even the heady days when Supre used to attract a football-size bargain-hungry crowd to its huge allotment in the inner Sydney suburb of Marrickville.
The owners of Double Bay Warehouse do not want to be quoted on the public record, and naturally I will respect that, but they did indicate that they are always open to looking at stock parcels.