Time to panic, everyone. Someone’s done a survey that’s hit a quiet
news day and suddenly the consumer is being told the British marketer is
ripping him off.
In breathless indignation, the smug mid-market tabloids share their
horror at the fact that in other countries people pay less for the same
products than we do here. What are we, the marketers, going to do about
Well, not much and quite a lot is the most helpful answer I can
It’s not a new story. For as long as exchange rates fluctuate, variances
in purchase or VAT exist, shipping costs, retail costs, staffing costs
and rents vary, so too will the price of goods around the globe. If
Vegemite is made in Australia, it will be cheaper in Melbourne than in
Earl’s Court. If the US has less import tax, cheaper fuel (meaning
cheaper shipping) and a strong currency, your Levi’s will be cheaper
there than in Lithuania.
That’s a fact of life, not a rip off.
With the rise of e-commerce though, surely there’s a threat to companies
that import products that are cheaper elsewhere. Well, possibly, is my
For sure, I can call up a website in Singapore and order the Hokki-Kokki
2000 that I have seen in Dixons for 30 per cent more. But first I want
to see it.
That’s not a problem if you enjoy a guilt trip - just go to Dixons, take
up the salesman’s time and get the hands-on appreciation before rushing
back to your screen.
But worries start to gather like dark storm clouds. There isn’t a real
person to talk to. Will they send the PAL version, or will I get one
that only works in the Far East? What if it’s damaged by some thug in
the airport cargo bay? What if it packs up after a week? Plus there’s
the import duty to pay when it arrives and the worry that your credit
card details are now being used by hackers to order up dodgy porn in
your name. Suddenly, the deal doesn’t sound so attractive.
OK, so that’s on a high-ticket price item. What about something cheaper
like a book or that tub of Vegemite?
It’s easy. Log on, find the book/Vegemite and hey, in four, five, maybe
ten days, it arrives. By which time, I’m starving.
Of course, you have to pay for the shipping and still have the credit
card worries, but heck. We’ve bought something on the net for pounds 8
when in the shop it sells for pounds 15. Well, we’ve spent more like
pounds 10 actually, with P&P. Actually, it’s more like pounds 11, once
you add the cost of logging on, the electricity and a percentage of the
PC purchase price, but that’s still nearly a fiver saved.
Call me old-fashioned, but I’m not yet so broke that a pounds 4
differential will stop me wandering into Dillons and doing it for
myself. The smart retailers know this and have made the buying trip a
’Retail Experience Ride’. Add a coffee shop, fresh newspapers and
croissants, good music, knowledgeable people to help you choose and you
can forget about looking overseas for the best deal.
Except, of course, to create such a retail experience costs money and
the only way to get it is via bigger margins and higher prices. Which is
when the newspapers, on a quiet news day, go to town all over again.
Ian Dickens is the marketing director of Olympus.