Pricing transparency changes the game

This contribution came originally as a reader’s comment on local pricing from Peter Michael, following last week’s interview with Canon Australia’s Darren Ryan. He has kindly permitted Photo Counter to republish these comments as an Opinion feature: 

We are certainly in changing times – the internet is changing our world by intensifying price competition over other forms of differentiation such as marketing.

Our customers often tell us that they are amazed to find identical goods being sold in other countries at quite different prices. A key concern is that many consumers simplisticly believe that much of the price difference is us (the retailer) profiteering.

An example that we often get customer comments on is film pricing. We understand that film is ‘old technology’, however, we stock a film that wholesales for $120 + GST which retails for USD$40 in the United States. Unfortunately it does not matter what we say, our customers cannot understand or accept that the price can differ so significantly. Our additional concern is the harm that this does to our reputation.

For decades manufacturers have successfully price discriminated in our market  compared to other countries because they have been able to keep the markets sufficiently separate. The internet has rapidly and succinctly broken down that geographic and knowledge separation and has reduced risk purchasing overseas at lower prices, thereby forcing our focus on global prices.

Yes, our task in conjunction with our suppliers, is as Darren says – ….’create an  experience, and create other value-adds around selling the product at a price that allows … us to charge a premium over a lower priced market because consumers can see and appreciate greater value.’

We have identical goals to Canon – ‘for consumers to buy locally in this country. With the assistance of their factories we applaud the fact and are most appreciative that many Australian suppliers have made significant progress in achieving global pricing.

We and (most importantly) our customers look forward to continued progress in achieving global pricing and working with our suppliers in building added value.

Peter Michael
http://www.michaels.com.au
Melbourne


2 thoughts on “Pricing transparency changes the game

  1. well said Peter Michaels…. as Australia so New Zealand… our lot accented with a 15%GST so the border loss is even greater – your 10 to our 15%GST… so the margins are cut but the specialty stores have nothing to fight back with except bloody good service and a ton of accessories …. but that is slowly being broken down too, the internet is King…oh for a republic!! Graham Glamuzina Progear Limited New Zealand

  2. My experience is the same as most of my friends …we look online, then try to get the same price locally …so actual sales online may not be as great as we think …But the impact on margins is great, and the customer calls retailers “rip off merchants” when it is the manufacturer combined with a lousy tax program that is causing the lack of trust between the retailer and the customer..I feel it is already too late to get it back (trust)…the gate has been opened and the horse has bolted…With all the recessionary pressures upon the industry this is just another nail in the coffin for speciality retailers.
    With over 80 percent of cameras being sold outside the speciality channel the customers are voting with their wallets…to quote a well-used political slogan “It’s ALL about the price, stupid!”

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