Interesting experience in recent days. I decided to by a heart rate monitor, the Polar I had needed a new strap which cost just about as much as the latest model, note the old Polar was bought in around 2003. Anyway one thing led to another and before i knew it I was looking at GPS + HRM in the likes of Garmin and Suunto as well as Polar. To cut a long story short I eventually bought the Garmin 610 and hopefully this will help me on my ongoing road to fitness, thinness and all round healthiness. I will save that for another post.

 

Online v Offline Pricing

Firstly, finding stores that sell these (offline) in Australia is hard other than for Rebel Sport. Please get optimised or into local search…

So for comparison here are some of the offline and online prices I found:

Polar RS 300X from the thepolarshop.com.au for $139. I found these guys were the exception, most would sell this model for around $189 odd.

Polar RS300X from from Rebel Sport in Top Ryde priced at $249. I note that on Friday the price was the same online and today it is $189 in line with above.

Garmin Forerunner 305 with HRM from GPS R US are $190 and a colleague had ordered from this site and vouched for it.

The same Garmin 305 with HRM from Rebel Sport is $349.99 as at writing this post.

I love Rebel Sport and to be fair ended up buying the Garmin Forerunner 610 as it has the swipe screen and the kind gentlemen who helped me at Rebel Sport got me a 10% discount which on this model matched the online price at GPS R US who I used as my benchmark. The point I wanted to make was twofold from my purchase journey:

  • The HRM manufacturers are starting to avoid local pricing by prohibiting retailers from sending product overseas, apparently Suunto has already done this per the salesmen and thus we will continue to get screwed as long as we have a strong dollar and things are cheaper overseas.
  • The other common story I had was that the retailer will beat another bricks and mortar stores by 10% but not an online price. So I can see they have the benefit of giving you the product there and then versus a 24 hour wait or more, but really the product is the same offline or online, how can you ignore the online price, are retailers sticking their heads in the sand? In denial that people are actually buying online?

I also happened to be chatting to my wife’s hair dresser who sells a professional range of hair products including GHD and he said most customers might like to see the product but many said they would buy online. A not uncommon story around many products at the moment. His conundrum being should he be cheaper if you buy his products online? If he was he would have to tell customers. If he did he might as well charge the same prices in store, and in fact this was easier anyway as then he didn’t have to pack the item and arrange/ pay for posting. But the customer expectation is that it should be cheaper online.

So what is an effective online retail stratgy?

Well the answer is, you need to find it, by testing, asking your customers and finding the model that suits your customer segments well. I mention segments as not all customers will be web savvy, those with kids may be time poor, spending preferences will differ and so on. You will also need to be competitive pricewise, as you can say I’m not prepared to discount, or we sell a premium product and thats fine, just watch your customers take your advice and walk out the door, or ensure you have a reasonable value proposition and that your offline and online retail experience match up. Maybe in the long term, brands might have a flagship store to allow customers to look and fell but understand they will buy online and reward the channel accordingly. Retail becomes globalised indeed.

This was not meant to be a rant about online retail strategy, rather just an interesting experience as to how offline retailers almost dont see themselves as competing with online retailers, I think to their own detriment in the long term. If you have read the Innovators Dilemma, you would also think, the online retail area should be separate to the offline to survive and compete. Online might cannibalise some sales but in the long term it will most likely save your bacon. Me thinks maybe there are too many managers with lots of offline retail experience applying this on online.