Charging to Browse - It's Inevitable
This week it was reported that Celiac Supplies is charging $5, refundable with purchase, to simply browse in their store. If you search Google news for "Celiac Supplies" you'll see hundreds of articles denouncing them. Why is everyone so quick to say this is a horrible idea? The consensus is they are not being customer friendly. For example the AdelaideNow reports that even Russell Zimmerman, executive director of the Australian Retailers Association said, "If I walked into the store and was told I was going to be charged to browse my immediate reaction would be to leave". But think about this. As pricing people we continuously emphasize, "create more value than your competitors, give your customers a reason to pay more to buy from you". The problem in retail is this extra value is usually delivered before the purchase is made. Value in retail comes in the form of a nice, clean, well organized showroom; the ability to touch and try before they buy; and most important helpful and knowledgeable employees. We are hopeful that when we deliver amazing amounts of value, the customer will feel guilty and buy from us. The fact that the value is delivered before the purchase also makes it more difficult to execute on a strategy of phenomenal service. Great service costs money and it's difficult to give it away with the hope that customers will purchase from you. Let's put ourselves in Georgina's decision. Ignoring the phenomenal PR this has given her store, she has 3 types of customers." Her current customers will probably remain as customers. Surely they spend more than $5 every time they visit. With fewer looky-loos she now has the bandwidth to give her real customers more attention and better service. Someone walking by who has Celiac or is lactose intolerant will probably pay the $5 because they are very interested in what's inside, especially the expertise. Besides, they can surely purchase something. Someone who is not lactose intolerant (like me) probably won't go in. That's good for her business! Without the entry fee, I could easily see me walking in and asking questions about the disease, the products, using up time and never purchasing. My advice to Georgina, take this opportunity to provide phenomenal service to everyone who walks in the door and pays the fee. Make them all thrilled that they shop with you. Go overboard. Now you know most of the people aren't just shopping price. Also, I would change the wording on the sign to say exactly that. "We want to provide great service to our customers. This is our way to tell who are customers are." One last spin ... I personally would be thrilled if BestBuy implemented this. I can't stand not finding someone to help me when I need help. I would simply shop there when I know I'm going to buy something and hopefully get better service. Celiac Supplies may eventually change their mind and stop charging for browsing, but if we want great service, retailers are going to need to find a way to get paid for it. This is inevitable. Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author Sign up for the Pricing Perspective, a free monthly summary of my blogs and other publications.
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