Is It Time To Start Charging Customers For Browsing?
I’ve worked in retail for most of my life.
That includes my first job as a janitor, then a regional manager all the way up to corporate VP and now as the Retail Doctor.
Throughout my career I’ve always heard merchants saying, “They come into my store and get all the information, and then go somewhere else to buy it.”
As a retail consultant, those responses used to infuriate me; it sounded like a losers limp. I felt it was an excuse for them not doing better because they miraculously “knew” their customers were at a competitor’s.
I always answered, “How do you know that?” They didn’t.
That’s all changed in the last few years…
Consider this story from a business owner who prides herself on custom fit swimwear for women. “We wait on women hand and foot with a process that takes no less than an hour most times and sometimes up to 2.5 hours to find JUST the right suit! Then occasionally there is the ONE customer who comes out with 2 or 3 suits and says, “Ok, I like these but I need to see if I can find them online for cheaper” and proceeds to write down all the numbers on the tags.”
Recently, it’s become more immediate…
A sales associate said that when she waits on customers at the fitting rooms, especially young women, at a certain point when everything fits, the dressing room goes silent. That’s because they scan with their smartphones to see if they can find a cheaper price online.
How did she know? They told her. This leaves the employee with mountains of clothes to clean up, and no sale.
It’s not just clothing…
What about the luxury retail watch salesperson? The one who could explain all the details of why the watch is worth the premium price. The one who invests her time in hopes of the payoff? Sure you can say the best brands prohibit online purchases which voids their warranty, but a customer may not know that if the store is the first place they check for information.
Or how about anything where a customer needs to make serious choices and the retailer has invested a lot of time to learn the products’ intimate details? Could be anything from noise reducing windows to window coverings. Could be custom bedding to custom flooring. It could be fine wine to fine china. You get my point.
Contractors got tired of having people “ask for a bid” only to see their detailed list of materials and time given to have some other competitor low-ball them out of the job. That’s why many require a non-refundable fee to get a bid.
What if a retailer charged a browsing fee or consulting fee in shops where extensive product knowledge is required? Would it make a difference?
What if you called it a non-refundable personal shopper fee that credits towards purchase within two weeks? If they returned the item later, the fee would not be refunded?
Would your employees be able to ask for it?
The dilemma many retailers are facing is, in an always-on mobile world, there is always someone always ready to undercut you. Always. And not just down the road but across the country.
Before that seemed isolated. Now it is real. What’s the point in opening up the store if you (essentially) give the goods away?
What say you? Is charging a browsing or consulting fee acceptable to you as a business owner? How about as a customer? If not, how do you avoid the showroom effect?
About Bob Phibbs, the Retail Doctor
Companies from some of the very largest, to some of the smallest, from luxury brands to startups, from franchises to regional chains contact me as a retail consultant because they are looking for results to the hard challenges facing their business. An owner may have read one of my books, seen my videos, seen me on TV, heard me speak or read this blog to get a taste of my people-focused philosophy and my methods.
While every client and project is different, the ability to enlist me as a retail consultant who has a fresh set of eyes to look at the challenges you are facing results in a focused, effective and creative path to profitable sales.
No matter what your size, let’s see how I can help you.
We can barely handle the post-sale add on, definitely don’t think we could handle a pre-sale one. I don’t think it would work. It would just drive more people to the Internet to do their research up front to avoid the charge and then more would buy on-line. The only way it possibly works is the “club” method where people pay a membership fee, but currently that format implies discount.
Good thoughts Todd. The club option could gain steam but, like you note, that implies cheaper. The missing piece for many is to “go and look at it and ask questions” before purchase. If customers value that advice but don’t value that advice, how will a bricks and mortar store survive? Thanks for jumping into the discussion Todd!
Welcome to my world (travel) where we’ve been combating this for awhile now – people come to us for detailed suggestions of where to go, what to see, where to stay, how to get around, including exclusive tips & tricks that aren’t found (or not easily found) on the internet. Once they have the information they disappear and book online. You are now seeing more & more travel professionals charging a fee up front to combat that. If they walk with our knowledge and book online, at least we’ve been compensated for that knowledge and the time we’ve spent with them.
Thanks so much for joining in Susan. Travel agents were the canaries in the mine! Glad you added your perspective!
What about a well designed ad campaign by your local retailer association with some slick saying like
“please don’t waste our time, if you’re going to buy online” in a nice font with some sort of symbol to put in your front windows to guilt the people into not being the sort of customer that will bankrupt stores
This is why I really wish that the amazon tax would be enacted nationally. The tax is what is toughest to beat.
I saw a sign taped onto a bookstore that was closing’s register, “No we don’t have a bathroom for your use – ask your friends at Amazon.”
Of course, guilt isn’t a reason to shop with a business. That’s why I personally have a bit of a problem with the “shop local” campaigns. I shouldn’t have to put up with subpar experience just because you’re local. Give me a passionate retailer who is focused on the customer, not by their words but actions and add that they are local and you get my business; whether you are an independent retailer, franchisee or part of a buying co-op.
Thank you so much for addressing this serious issue!We are a specialty hearth /casual furniture retailer and have faced this dillema many times. We currently charge a $100 fee to do an estimate. We let the customer deduct that from their purchase. If they take our info and run, they’re out $100 and at least we’ve covered our time & travel expenses. It has separated the serious clients from those who just want to gather estimates and waste our time. It has not affected sales at all. I don’t think we’d get away with a “browsing fee” in our showroom. We constantly battle being used as a showroom for the internet. We strive to mix up brands on our showroom floor – not showing things as a “matched set”. It makes it much more difficult for the consumer to shop you and most likely they see something they can’t live without. Thanks!
Glad to know I’m on track Megan broaching a subject few customers would ever consider but that weighs increasingly heavily on retailers. Thanks for joining in!
Thank you Bob for enlightening me on this problem. When I first seen the teaser on this – I was a little skeptical- but after reading it – what a dilemma – We have this problem with purchase of online convertible tops. I wish consumers would think more on what they are really doing by not keeping their local area thriving and growing. Thanks Bob — Keep up the good work! by making us aware and always thinking outside the box!
Thanks for commenting Sueann, you used the right word, a dilemma.
Very interesting view on this increasing issue.
Deductions from the purchase is an EXCELLENT idea for a retailer who is able to really deliver one on one service. I would personally never consider the concept of paying to JUST browse a shop, I would consider it if it was a charge for a consultation where I got excellent service and knew I was going to walk away with what I wanted and more. J Crew has similar program. It would need to be a reasonable percentage of what an average purchase would be.
As a note as a consumer, I personally know what I want when I find it and will make the purchase. At that point I have already spent time finding it and won’t go off somewhere else to find something that may be slightly different to save a few (more gas money, more time, shipping if done on line, item could them become unavailable, are all issues that would then concern me). Sales staff should also be educated and practiced on how to respond to clients concerns, in a kind and helpful way (on the spot).
Thank you so much for joining in Amy! It has many sides to it and unfortunately a retailer can’t just say to “grin and bear it” as more and more consumers adopt the showroom mentality.
As Susan mentioned above, more and more travel agents are becoming specialized and are charging consultation fees for their time. You will find many are emulating the model of that of a Certified Financial Planner getting paid to recommend what is best for the client’s personal situation.
Our particular model is that we collect the fee that never applies to the purchase, but we offer to refund that fee if expectations are not met or exceeded. Travel agents are selling themselves first and travel second and those that are charging are providing “Google-proof” knowledge. Knowledge which is far different than information. Charging fees has also led to higher yielding clients as well in many cases.
Great to hear that the “Google-proof” knowledge is rewarded with higher sales Chuck! Thanks for stopping by.
Bob,
You are pushing us to think WAY outside of the usual “box” – I love it!
It made me think about wine tasting. I have to pay a tasting fee to sample the wine, but typically (unless it’s Ponzi Vineyards in Beaverton, Ore. which is a whole other story) when you buy a bottle, your tasting fee is refunded.
So, I LOVE the idea of a consultation fee. If someone is going to be spending time with you – like a bridal shop or a furniture store of the swimsuit shop you mentioned – there should be a consulting fee. That way – no matter what they decide – time/money isn’t wasted. Then if they decide to buy the money is deducted off of their purchase or like with wine tasting, they give the money back and charge you just for the purchase.
Brilliant!
Thanks for making us think.
-Heather
Excellent example with the bridal shop Heather, an important segment of independent businesses prone to spend a lot of time to get just the right gown. Thanks for commenting!
My husband & I have owned a retail saltwater fish pet shop for 19yrs now & have seen our industry really change since the invention of ecommerce. Everything we stock is available cheaper online. After years of being a showroom for products we did several things to help combat the *waste your time buy it online* shopper. So, here are a few things that have helped us:
1. Know what the online prices for your products are. Most people will pay around 20% to 25% more than the internet price.
2. Know what kind of margin you have to have. If the 20-25% above internet example doesn’t give you enough margin on every product, do it on the ones that it will work for. The perception will be that you are competitive with the internet (especially when you include shipping) & people tend to not nickel & dime you to death.
3.Know the popular products for you market & try to keep them in stock. If you don’t have them people will assume that you aren’t keeping up with the trends & will go elsewhere.
4. Keep your shop fresh. I generally change displays every few weeks and about twice a year I change the entire store. It’s kind of a pain, (& my husband hates change) but people seem to notice things they didn’t notice before, which generally generates sales.
5. One of the biggies for us anyway, is to make sure all of your staff is on the same page. Saltwater fish are very expensive and people tend to ask several employees about what will work in their tanks before making a decision to buy. If a customer asks several people the same question, they better get the same answer from everyone or else they will walk away and go buy somewhere else.
6.There are MANY online forums and fish clubs customers join to exchange information, tell each other about online (cheaper)places to buy, and yes, even talk about the local stores. We don’t recommend joining the online communities, we have tried in the past and always found ourselves frustrated and even mad at times. It is wise however, to read them anonymously. They are a good source to keep up with trends, find out what customers like & expect from the local stores, and also what they don’t like. These clubs are kind of like unions and they will try to force you into giving product away (meaning dropping your prices below where you need them to be) if you let them.
7. Write to your manufacturers & talk to your sales reps. They generally respond and most of the time will find a way to work with you. The worst they can say is NO, but…you won’t know unless you try.
I have tons more I could say, but I better quit talking for now. Hope this helps.
Thanks for commenting Tonya.
Hi Bob,
I have to respond to your comment about “Buy Local”: “Of course, guilt isn’t a reason to shop with a business. That’s why I personally have a bit of a problem with the “shop local” campaigns.” We’re in Bellingham, WA, one of the cities that led the charge in “Buy Local.” It’s never been about guilt. It’s been about educating customers about the value we add to the transaction and to the community. Like every educational campaign or movement, there are those who are willing to ride the coattails and not do the hard work. Being a great retailer is, these days, a required quality just to stay in the game. But please don’t slight the “Buy Local” campaigns. In a survey conducted in our county, 69% of the people polled were familiar with the campaign and 3 in 5 said they had changed their behavior because of it.
Thanks for joining in Chuck. I’m not slighting Buy Local but I’ve been to plenty of stores http://www.retaildoc.com/blog/is-your-nursery-garden-center-doomed/with Buy Local that seem to think that marketing slogan will save them, that its just a matter of getting people in the door and the like. It’s about exceeding their expectations. There are some segments of the Buy Local that slight franchisees. Why is that? The franchisee is paying all the salaries, etc of the locals and having to pay 6% of their $ to the franchisor. Shouldn’t they be considered local? This probably is another post I’ll have to write some day along with the cash mob phenom.
Thanks for commenting Chuck.
Iam an interior designer plus a furniture store. I charge to go on a in home consultation. I have an area of the store that has all my fabrics, samples of hardware, design tools etc. that I was thinking of having signage that says something to the effect you must be with a designer to enter this space and a hourly fee will be charged. I wasn’t sure if that was too bold.
Pretty bold Sarah, yes. Why use a sign? Why not just greet them with something like, “Welcome to our custom design service! May I tell you how we work? When they say “sure” tell them what you do exactly and what your services run and how you can make their house a home. That way you personally walk them through your process instead of potentially turning them away. Make sense?
Wow – these issues really hit the mark and very close to home for us. We are in a rural area and our customers tend to be ‘mail order’ familiar and now ‘internet savvy’ from birth. We might spend an hour with a customer to find the right color fabric scheme for a quilt top or a $200 framing order. Our collective guess is about 20% success with a sale. Very expensive. The only rule we have is a 5 minute time to get to a price in the course of a custom frame design so we know where a customer is at in expectations.
Interesting you have a time limit, that might be a place to start Hartland. Thanks for joining in the conversation!
My business has dealt with this for nearly 15 years as a local computer store. What we have learned is that there are a handful of shopping behaviors people exhibit and we do our best to appeal to all of them. Our website has an online discount for all of our computer-related items and local shoppers can get that price if they print their shopping cart and bring it into the store. This handles most of our discount shoppers and prevents them from taking the time of a retail salesmen because they’re just picking up parts. Repeat customers that are low maintenance can get the discount automatically. Customers that pay the in-store price get the attention of a knowledgeable salesperson (and probably the better value). If consumers cannot discernthe difference between buying from you and buying from Amazon, that’s your store’s fault. And if your sales staff are cheapskates themselves, they are more likely to identify with customers that exhibit discount shopping behavior and allow them to walk away without being brave enough to ask for the sale at the higher price and to explain what the premium gets them. Again, if you’re not offering anything for this premium (before and after the sale), it’s going to be an uphill battle.
Wow Robby, great line, “And if your sales staff are cheapstakes themselves, they are more likely to identify with customers who exhibit discount shopping..without selling the higher price.” I was at an Apple store. You know, Steve Jobs, Ron Johnson, walk-on-water Apple store with the Ritz Carlton service program..
I was about to buy a program and said I also needed a Terabyte interior hard drive for my desk top. The salesclerk said, in full voice, “Oh don’t buy it from us, go to NewEgg, much cheaper.”
Stunned I ended up ordering from the competitor for $20 less. Geez…. Thanks for joining in!
It’s hard. I work in a retail toy store (I was actually linked to this article from the American Specialty Toy Retailers Association forums). I have customers who profess to adore me. They come for all of our (free) events, their kids play with our play tables for hours while they look around.
They ask me questions, flip through all the kids books, and then *click* buy it on Amazon and leave. I spent almost an hour talking to a woman in the store who, after many suggestions and after looking through many books on our children’s bookshelf, found the “perfect” book for her son’s birthday (all the while her younger son keeping himself amused playing with our trains). She came up to the front counter and announced that she found it $2 cheaper after shipping on Ebay.
I explained to her that we have in-store events (that she attends regularly), play-with-me displays, knowledgeable staff, and the like, and that all that costs money. She nodded and replied, “but I can buy it cheaper online”. I tried to explain to her that if everyone does that, our store will go out of business and she won’t have somewhere to come and get advice and let her son play (and will ultimately end up buying multiple books for him online because she’s not sure which she likes best until she’s read them cover to cover). She wanted to understand, truly. But it’s been so ingrained that “cheaper is king” she just didn’t get it.
So while I appreciate the theater of retail and the necessity for a “wow” customer experience, people buying it online isn’t always the retailers fault. Sometimes they would NEVER purchase an item online unless they had a chance to see it, touch it, feel it, ask questions about it first. And I have more and more customers like her every day.
I hear your frustration Anne that’s why I think it is time to consider browsing fees or time limits for sales staff to spend with people or something. Customers are taking advantage because they can.
Frankly I think if it had been me I would have asked the customer not to come back again. She obviously didn’t value your service or location or babysitting. You can’t build a business on her and she should know it.
And if she complains on FB or other social media, you can tell your story even better.
‘Give me a passionate retailer who is focused on the customer, not by their words but actions and add that they are local and you get my business.’
Bob, you nailed it on the head, right there!
We all live on “both sides of the coin” & don’t want to overpay for something that could easily have been had in the absence of “personal” service. I want to meet, know & appreciate people & their work…but, when the effort to communicate “Hello! I sincerely appreciate your business” is missing, well…that’s one major reason we (all) shop on-line.
Great point Carlos! We’re all working much harder to have what we do in our wallets, without that attitude, we look elsewhere- quickly.
Very interesting. I’m not a retailer, but I am a bookworm. I also earn a living online (although not as an affiliate marketer). I do the exact opposite of online shoppers. I read reviews on Amazon and buy at the bookstore. Nothing substitutes for the privilege and pleasure of having the book there to look at, to be able to sit and read in quiet surroundings. I think I’d even pay a nominal entry fee to enter the nicest bookstores! I think the habit of leeching information from expert store owners and then buying online to save a few dollars is reprehensible; it is also foolishly and selfishly undermining the quality of life in your community. Imagine a community with nothing but horrible bland big box store and none of the interesting and varied shops. Perhaps this is something that retailers can bring to the attention of citizens to raise their consciousness. Just my two centavos.
Thanks for stopping by Jim, you are certainly the exception I think to what I’m seeing. And you’re right, if customers don’t change their habits all that exists is online. And with retail representing 1 in 4 jobs in the US (Stats from the National Retail Federation) it doesn’t bode well for the whole nation.
As retailers, we make it too easy for customers to shop us. The reason that Restoration Hardware and Pottery Barn are so successful is because they brand the store with house brands, and not the manufacturer’s label. If a manufacturer does not support brick and mortar stores, and allows distribution of their product to run rampant on line, it is time to drop that brand, or rename it. The customers who use us could care less that they use us; they pat themselves on the back for being savvy consumers. If we know we are going to get used, it is our responsibility to do something to make it harder for the consumer to use us.
I agree private label can be a help Karen. Thanks for joining in!
I have always thought the future may be showrooms for certain products – clothing, electrical goods. Similar to trade buyer showrooms, but for the public.
The public view the items, try them on and then order them there and there via the internet from the retailer’s online store, via terminal in the store. The purchaser is offered a discount plus a loyalty bonus and the guarantee the product will be delivered to them within 24 hours, if they order there and then.
Each person could be charged a set minimal fee to enter the shop which is deducted from the purchase price, if they buy from that store.