I may not be that normal in many respects, but I do often get onto trends quite early and this year, I have shopped for Christmas differently to any other year before – and I think shopping may never be the same again.
I’ve written lots about the perfect economy, price driven shopping and how branding can help build differentiation. I’ve even written about online/offline price matching but this year it all clicked into place and a few online retailers got all my business.
Some examples.
Fifa 11. RRP £52 HMV high street price £39.99. Game High Street Price £39.99. Amazon price £24.91 delivered. Using the Red Laser App on my phone, I actually bought it on my Amazon account on my phone standing in HMV. I hope Red Laser are taking a commission.
Morse the Complete Collection. RRP £199.99 (yeah right!) Morrisons £50. Amazon price £34.97 delivered. Again, bought standing in Morrisons.
And I bought from Boots, Tesco, Dixons and a few others too. All turned up in plenty of time and I saved a small fortune without having to brave the ridiculous queues at the tills in the stores. There must have been 50 people queuing in the unsurprisingly poor performing HMV. They are playing into the hands of online retailers.
Again, I don’t think i’m particularly tight, but I can see no reason at all to pay more for an identical product and the privilige of buying on the high street.
If the high street doesn’t just want to become a gigantic Amazon showroom, it needs to find a way of reflecting the price of the online retailers.
Sports Direct match online to offline, and I’ve shown before that Waterstones and HMV don’t. Which do you think is likely to still be in business by February?
I was given the book ‘How to ride a Giraffe – By John Timpson’ by the people from the rather excellent Real Business magazine and so thought it would be well worth a read, but I have to say that some of the first chapters really bored me – the history was fascinating but it was all a bit self congratuatory. But then it got to Chapter seven ‘Only great people need apply’.
In this chapter, rather than looking back at what a clever bloke he is, John Timpson opens up about the recruitment of Timpson’s staff. His conclusion is that if they had only tried to recruit cobblers, they would have had a choice of 30,000 people or so, but by aiming to recruit people with the right attitude, they had a far wider choice and they could easily teach them to mend shoes, given a year or so of training.
This is something that is very easy to overlook – particularly when times are tough. We are in danger of reverting to type and taking on people who are a safe pair of hands and can be dropped in to do a safe job for the business. But this can only ever put you in a holding pattern. Safe people will only ever maintain or slightly decline your business. Stars make it grow.
If you look at how US basketball teams recruit, they look for giant kids. This is their version of buying the hardware. They know that again, they can teach some (or maybe even many) of them to play basketball – ie, adding the software. You can’t teach a kid to be a giant, just as you can’t teach an experienced cobbler to be a happy person with a customer service attitude, so buy the hardware and add the software with good training and mentoring.
I’m reserving judgement as to whether the whole book is worth reading, but so far, this chapter alone makes it well worth the effort.
For anyone who knows me, they’ll know i’m quite into my food. I love to cook and I love to taste different flavours – cooking fresh spicy Italian is probably my favourite and the one my kids will eat with me bowl for bowl.
A few years ago (well, maybe ten), I discovered the wonders of Chorizo – it’s like a super ingredient to add to pasta to take a simple tomato and pesto sauce and turn it into a deep paprika spiced bowl of loveliness.
When the Aldi opened near my Nottingham office, I sceptically wandered in to have a look and realised I could access lovely quality Spanish Chorizo at near Spanish prices. I bought it, I cooked with it and I was impressed.
But recently, they changed supplier, or at least changed recipe to hit a lower price point and it’s a pale (literally) shadow of its former self.
Now, it may seem a bit odd to get obsessive over Chorizo and how it relates to a big brand like Aldi, so it’s caused doubts. Where else have they started cutting corners?
If your offer is great quality at low prices that means you are working towards the principle of ‘how good can we make it for the money?’
if your offer changes to low prices, then the change in emphasis for the brand means the new mantra is ‘how cheaply can we get away with making it?’
So, if i’m right, then all their time spent recruiting new middle class shoppers has been wasted. They’ll all wander back to their normal suppliers and Aldi will be back as a low cost shop – ie a shop for low cost food and household things we’re not sure we need – and not the brilliant discount retailer it was becoming.
Nottingham's perfect market economy in the old days - if a seller sold bad product - everyone knew
I’ve written a few pieces recently about consumer power (and blogger power) and wonder whether we are reaching the position of a perfect market economy. That is the previously theoretical situation, where all the buyers having all the information to buy identical products.
When I studied economics at school the section I was most fascinated with was the perfect economy.
And I think that we’re almost there, because that’s the Internet now isn’t it?
All the buyers have all the information and almost all retailers are selling identical products.
And, as the theory of the perfect economy states, if all the buyers have all the information and the market is selling identical products, then people will always buy from the lowest price supplier. This has to be true, doesn’t it?
Well, no. they’ll buy from the one they trust the most, as long as the price is there or thereabouts.
My mate and business guru Andy Hanselman once said to me that ‘advertising is the price you pay for being mediocre’.
He’s right.
Products and services rise from mediocrity by being exceptional, by being differentiated and by being well branded.
So rather than the internet killing brands, it’s offering them the most incredible opportunity. A world at their feet, that’s theirs for the taking.
I don’t want to appear like a freaky TV pricing groupie, but I got an email this morning from Best Buy. The US phenomenon that was going to take our market by storm when they opened in Lakeside shoppping Centre.
Forgive me for being underwhelmed, but like the sad act I can be at times, I price checked them against my usual suspects Dixons and John Lewis. And guess what?
They’re really a worst buy. It’s £319.99 at ‘best Buy’ with a normal warranty.
Samsung LE32C450 32" LCD HD Ready TV from Best Buy
It’s far cheaper at Dixons at only £274.72
Samsung LE32C450 32" LCD HD Ready TV from Dixons
And an excellent value £296 with a not quite free five year guarantee at John Lewis.
Samsung LE32C450 32" LCD HD Ready TV from John Lewis
We are now working in an almost perfect market, where all the buyers have all the information and the lowest price wins all the business. For me that means you choose whether it is worth an extra £22 for a four year extended warranty (it clearly is here!) with John Lewis.
Best Buy? Brand values that deliver what they promise?
You judge for yourself.
Updated
Now, i’m not going to suddenly claim to be the people’s champion, but I did notice a rather large spike in my traffic to the site yesterday and, guess what? Best Buy have reduced the price of the Samsung LE32C450 32″ LCD HD Ready TV to a more reasonable £278.99. A reduction of £41 or in percentages, 12.8%. Is that the power of bloggers like us who Andrew Marr likes so little, or is it a pure coincidence. Again, you be the judge.
Blogger Power - the newly reduced Samsung LE32C450 32" LCD HD Ready TV
A colleague of mine pointed this out to me and declared that it was nearly as good as the 1985 Nick Kamen Levis Ad. But I have to say I totally disagree. I love the version of the song but I found myself totally captivated by Lemmy’s face lumps. Quite what these say for a wannabe stylish chic brand, I don’t know.
I think it’s interesting and I’m happy to be proved wrong with either cult status or massive viral numbers, but for me, it’s just not groundbreaking or revolutionary enough. It won’t make me go and buy the beer anyway and that’s the real acid test.
I’ve been wondering for some time now whether the .com. .co.uk. .net and .eu suffixes are all we need to buy when we launch a new brand for a client. We don’t want to make the mistake of Wolff Olins, when they were preparing to launch ‘Introducing Monday ‘ back in 2002.
They forgot to buy the .co.uk and b3ta placed a joke site in it’s place, effectively stopping the launch altogether and wasting £7m of PriceWaterhouse Coopers consulting’s money in the process. But we all found it very funny indeed and it did at least launch the brilliant b3ta into the big time.
But for me now, I wonder whether we will need domain names at all soon. If the research from TGI Europa as far back as 2008 BA (Before Apps) is true, then 87% of all Internet activity starts with a Google search. So, domains will become irrelevant. If you watch the ways kids use the Internet, they either go directly through Apps on the iPad or they go to Google and key the name of the site they want. So to get to Facebook, they either app it, or go via Google.
If this is true, then pretty soon, Google is bound to stop showing the domain suffix anyway. We’ll just be delivered to the Facebook area, the Ebay area or even the Oxford United area and we’ll become less and less concerned with what specific domain this is on.
So for brand owners, it’s about building your name again. Forget the domain name, concentrate on the name itself. That’s where Google will be going in the future.
As long as I want to go to Islington, where the council have cleverly made sure that even folically challenged people are represented fairly. Good work chaps.
Park especially for bald people - courtesy of Bitterwallet
I don’t even know this bloke, but I know I like him already and would urge you to support him on his quest to raise money for Starlight. What a cool charity and you can read about them here.
A friend of mine emailed him and got this bounceback that puts even ours to shame.
The best out of office ever - help support Simon Biltcliffe - the self confessed least likley runner in the world
Just so you don’t miss the link to his Just Giving site, you can see that here.
If he runs the rest of his business WebMartUk as beautifully as he’s written this, then it must be a rather excellent one.
I wrote a piece last October about Dixons and their advertising approach that directly attacks John Lewis.
Well in the last few months, I’ve had two opportunities to test them out and judge for myself. My conclusion? Well, If I tell you I bought both times from Dixons and have been surprised and delighted by their service, then that maybe says it all.
The first time was for a TV for my son’s birthday. Dixons was just miles cheaper for a like for like product. I bought from them, thinking it was something of a risk, but it was perfect. Timed delivery, well packaged, perfect paperwork. Overall excellent.
The most recent time was only last week when our own TV blew up with no chance of repair. I looked at John Lewis and then price compared them with Dixons. Whilst the model number is not identical, the spec itself seems absolutely identical. You decide!
Samsung 37" LCD TV from Dixons at £399.99
or
or a Samsung 37" LCD TV from John Lewis at £499.95
So the price difference is a massive £100 or in this case, Dixons are a full 20% cheaper. Therefore, what you have to be paying for is the extra guarantee that John Lewis provide. Their claim that this five year guarantee is actually free, is nothing short of scandalous. It’s not, it’s £100.
John Lewis used to claim they would price match anyone, but they have varied the model number slightly so it’s not an exact match and they have added the spoiler of their so called ‘free’ guarantee. The price match in this case would not, by their rules, be a valid one and they would refuse to price match. They would back this up by saying they wouldn’t price match an Internet only retailer like Dixons anyway.
I guess you pays your money and you takes your choice. I chose the rather more honest approach of Dixons. Twice.
Updated
Karen in Customer services has responded twice to my comments which does at least show they have a bit of a system. As you can see below, both comments are almost identical so i’m not being palmed off with a total cut and paste job.
John Lewis price match details - from Karen in Customer Services
if you can’t read this, i’ll put it in full here:
Hi John
I just thought it might be helpful if I explained our position further.
We reviewed our Never Knowingly Undersold terms and conditions on 6 September 2010 to include the matching of on-line competitors something we hadn’t done up until then. We match those competitors who trade in the same way as us in that they have a high street presence. As Dixons trade solely on line we do not match their prices.
The two models that you highlight are different. Dixons also sell the LE37C580 which they have priced at £438.95. We use the model numbers our suppliers give us and I would like to reassure you that we wouldn’t deliberately alter them to duck out of having to price match.
We always try to offer exceptional value on our TVs – on this product we’re at the same price as our key high street competitors most of whom only offer a 1-year guarantee. Therefore we would consider that our 5 year guarantee comes at no extra cost to our customers. If this additional guarantee is particularly important to a customer they would find that these key competitors would charge up to 33% more than our selling price to offer the TV with the same service conditions.
Having said that I understand it is completely your decision to choose where you make your purchase but I do hope that my explanation of our arrangements is of some help
Kind regards Karen Eardley Customer Service Manager John Lewis Head Office
Updated again
When I get it wrong, i’m happy to admit it. And in this case I got it wrong. The specs of the two TV’s I used as a comparison are not the same. The John Lewis one has an HD Freeview Tuner and the Dixons one has a normal NOT HD Freeview Tuner. As you’ll see from the comment below by Ricardo, the specs can’t be compared and as such, neither can the prices.
Oops, I got it wrong, thanks Ricardo. HD Freeview is not the same as NOT HD Freeview
But luckily, steaming to my rescue is Karen from John Lewis Customer Services (who Ricardo doesn’t work for). She points out that Dixons do carry EXACTLY THE SAME LE37C580 TV at £438.95 and they won’t price match that either. It’s out of stock though so it’s either selling like hot cakes or an old model.
LE37C580 TV with HD Freeview at £438.95 from Dixons
Okay, so my maths isn’t quite as dramatic. It is not 20% cheaper buying from Dixons, it’s 12.2% or exactly £61.
That to me sounds like a saving. John Lewis won’t price match Dixons, but you have to take the decision as to whether you think the £61 is worth it for the extra warranty.
Johnny Lyle's new brand thinking 