Canon Store promo undercuts retailers

Canon is offering products at a 20 percent discount from its online store until June 30, using a promotion code offer circulated to staff, who are encouraged to pass it on to their family and friends.

The Canon EOS M twin lens + 90EX Speedlite kit is just $799 from the Canon online store with 'Family and Friends' discount.

The Canon EOS M twin lens + 90EX Speedlite kit is just $799 from the Canon online store with ‘Family and Friends’ discount.

The 20 percent discount is in addition to already reduced prices on some products. A Canon EOS M kit with 18-55mm and 22mm lens and 90EX Speedlite is available from the Canon store for $999 on special (down fro $1149) and with the 20 percent discount applied is just $799. The Camera House online price for the same kit is $1049 plus $9.95 delivery. Canon insists this is not representative of real pricing in the marketplace.

There is no requirement for consumers taking advantage of the offer to validate their ‘Family and Friends’ status – they simply have to know and key in the promotional code. Canon in the US had a similar promotion for its online store earlier this year, although the 20 percent discount was restricted to Powershot cameras, with a 15 percent discount on ‘refurbished’ DSLRs. This found its way to websites such as DPReview.

‘I have just finished a conversation with a customer regarding our price for the Canon 5DIII Pro Kit (5DIII with 24-70 mm lens),’ one Canon pro dealer told Photo Counter. ‘After demonstrating the camera and comparing lenses, etc, she settled on this kit. I quoted $5950, which is a good price. Teds are $50 cheaper, DCW is a bit more, Camera House website is a bit more, but our local Camera House would probably match our price…

‘She is aware of the so called risks of the grey market, and would probably have bought from us, BUT, luckily for her, a friend of a friend forwarded an email from someone whose godfather works at Canon, and there is a discount code you can put into the direct Canon sales website to get 20 percent discount, with free delivery. No evidence needed, just need to know the code, which is doing the rounds in Facebook.

‘The 5D III pro kit is already $5999 on Canon’s website, so 20 percent off makes it a pretty hot price. Anyway, she thanked me for helping her with the camera, but will be buying direct.’

‘- And at that price, I should too!’ he added.

Canon has since increased the Canon Store price for the EOS 5D III kit to $6499 and told Photo Counter, ‘we can confirm that no sales of this camera were made at the discounted price for the limited time it was live.’

At the other end of the spectrum, the Powershot S110, reduced from $429 to $379 by Canon online, is just $303 with the discount applied ($399 on the Camera House website).

‘I am prepared to be undercut by another Australian shop, and am resigned to sometimes missing out to an Ebay supplier,’ said the independent retailer, ‘but am not keen on being undercut by my own supplier.’

The Canon online store went live late in 2011 with a limited range and high prices relative to Canon’s retail customers. At the time Canon said pricing would ‘not be that exciting’. This is how Canon Consumer Imaging director, Jason McLean described the online initiative to a PMA group in September, 2011: ‘I think the reality is the online channel is a distinct channel, whether we like it or not. As CE is, as mass is, and as photo specialty is.

‘So Canon’s position has always been we need to be where the consumer is. The difference is that this channel is direct to consumer.

He said he didn’t see the Canon Store as a threat to photo specialist retailers.

‘The way you manage your consumer from an in-store experience, your knowledge, your know how – the reality is there is no reason they [photo specialist customers] would buy from Canon.’

He said at that time pricing on the Canon Store would not influence photo specialist customers: ‘Our pricing is not that exciting to a consumer that wants to go and get knowledge from an in-store experience.’

Photo Counter has followed up with Canon, and its prompt and extensive response is published in full and unedited below. It needs to be said that Canon is not happy with this approach, judging the story above is misleading in content and structure, and explaining that: ‘Running the Q&A as a “reply” implies that we accept the premise of the lead story – we do not: Retailers are able to compete against our direct prices. Your “random” price examples are not representative of store pricing across the market or the value to be found in-store.’

1. Is this a genuine offer from Canon or is someone making mischief?
Most ‘good’ companies have benefits to their employees with regards to discounts on products and services and Canon is no different. Many of our biggest retailers have ‘Staff & Friends’ promotions during the year and Canon staff have been extended the offer, which is great to see that our retailers see us as ‘friends’.

2. Is this the kind of thing (20 percent discount via social media, not necessarily out to Canon family and friends) Canon would consider doing in collaboration with its retail customers?
To be clear, the ‘family and friends’ offer is via email only, not our social channels. As mentioned to you in our last correspondence, retailers leveraging our campaigns and channels and marketing to our databases is something that we actively foster.

3. Will you be able to distinguish between ‘family and friends’ and someone who is neither who has come across it as it ‘goes viral’.
The offer is limited until June 30th and is not in our social channel. Your assumption that this will ‘go viral’ remains to be seen.

4. Was this sent to all Canon staff?
Yes.

5. Did you brief your retail customers on this promotion prior to it going out?
No, we don’t communicate any of our offers to retailers as this would contravene the Competition and Consumer Act 2010.

6. Does Canon see an offer like this in keeping with your kyosei philosophy?
Kyosei – living and working together for the common good – is at the heart of everything we do, and we have put our money where our mouth is time after time.
Kyosei explains why we are taking every opportunity to achieve market growth in Australia from which we all benefit. We are pleased that some high-profile media such as CNET yesterday have recognised the big moves that we’re making at a time of significant change and are helping us to drive consumer awareness of the value to be had at local retail.
To recap some examples of our recent moves in line with kyosei for you:
– launched our largest-ever marketing campaign in 2013 to engage consumers in the complete imaging experience and draw attention to Canon locally ($13M in media alone);
– actively creating opportunities for retailers to leverage our campaigns, channels and even wholesaling our services (e.g. Canon Academy);
– taking continued price action since mid-2010, with millions of dollars in retailer support so far in 2013 alone;
– withholding RRPs from media (against significant resistance) to remove a competitive disadvantage for local retailers online;
– rolling out local warranty across all camera products and introducing a Canon Care Pack for local retailers;
– continually encouraging consumers to go in-store to see the value that’s on offer (media editorials, social media, EDMs);
– investing in experiences such as the consumer imaging show at Vivid to inspire and engage as many people as possible to get more out of their imaging;

Finally, within the next week we will go live with a NATIONAL PRESS AD CAMPAIGN entirely funded by Canon featuring local retailers with a simple call to action – to go to their local retailer to get a Canon deal. With unprecedented value now in local stores, we want to make sure that everyone knows about it.

Here is the text of the promotional offer Canon employees are being asked to circulate:

Dear employees, 

From now until Mother’s Day (Sunday 12th May) we are running a special promotion on Canon Store for consumers. The promotion includes great discounts across all product areas. 

Encourage your family and friends to spoil their Mum’s (sic) this Mother’s Day with Canon product! Remembering that your family and friends also can receive an additional 20% off these sale prices (when using the Canon Family & Friends Offer – enter promotional code XXXX (on checkout). [Promotional code withheld from publication by Photo Counter.]

Canon Store also offers free nationwide delivery. 

Please share this offer with your friends and family today as Mother’s Day is just around the corner!

 


8 thoughts on “Canon Store promo undercuts retailers

    • Not the smartest idea. Given Canon’s current market share, you might as well buy a service station and refuse to stock unleaded.

  1. So why does a Mothers Day promo to staff go till June 30?
    On my calendar Mothers Day is next Sunday.
    This whole ‘family and friends’ concept is a blatant attempt at social media viral selling. Pretty smart really, by June 30 it will have plenty of ‘shares’
    But is it good for Canon retailers, certainly not.

  2. We don’t sell cameras, as a matter of choice, but if we were stocking cameras, I’d be pretty disappointed in this action by Canon.
    I have difficulty seeing how this supports their (probably previous) dealer base.

  3. Are there any suppliers left that aren’t competing with their retail ‘partners’? Correct me if I’m wrong but the list now includes canon, Nikon, Sony, crk, ur1 …

    • There are a number of suppliers offering products to consumers, it’s true, though certainly not all suppliers. Some retailers have actually viewed supplier websites with sophisticated product showcases and interesting content, and premium priced product for those who for whatever reason are attracted to ‘buying direct’ as a positive, both as a marketing communications tool and because retail street prices look good in comparison. But getting down and dirty into price competition with your retail customers is another step down what could be seen as a slippery slope. When the initiative comes from the market leader it legitimizes competing with your customers and puts pressure on competing suppliers to follow that lead. This is why we have featured this story in Photo Counter.

  4. What a load of marketing bs Canon. I remember not too long ago you saying “Canon will not sell online or always support our resellers”. Yer right. Since you have closed a lot of Canon accounts around Australia, your long term goal was always selling online. Kyosei means “Working for Canon’s common good and goals”. I still can’t understand why Canon Japan sells their products so cheap to other resellers, where offical Canon Companies should be able to buy it cheaper. Maybe Canon Japan’s greed comes first. I know a customer who makes for a large Japanese company and some online sellers are selling cheaper online than what they buy from their own company in Japan.

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