Good store, bad marketing
Posted on:: January 9th, 2005
NewEgg is my favorite place to buy hardware: Near rock-bottom prices, no-hassle returns, lots of information about what you’re buying, customer reviews for every item, no monkey business about shipping costs. I have a good feeling buying from NewEgg.
But I hate their marketing campaign: “Shop there, buy here.” We’re supposed to go to our local computer store, waste some salesperson’s time, get her expectations up that we’re going to buying from her, and then buy at NewEgg because Newegg’s prices are low … and those prices are low because NewEgg asks us to steal services from another store.
I don’t have a good feeling about buying from a parasite.
Categories: Uncategorized dw
Hmm … is this ‘bad marketing’ or ‘reality marketing?’
Seems like NewEgg is managing to the problem of knowing consumers will research purchases somewhere other than NewEgg (be it through online or offline sources).
Now it seems like local computer stores need to manage to the ‘NewEgg problem’ and make sure their customer service is so good that all people will feel like parasites buying stuff elsewhere.
I agree, David. It’s shady.
At the same time, I think it’s true that an increasing number of people are doing their research online instead of in a retail outlet. Nowadays when I want to buy a digital camera I visit a half a dozen professionally-maintained review sites, examine hundreds of consumer-written reviews, read up on the manufacturer’s specs and then make a decision. What could I have done before the net? Go to a retail outlet where someone who may or may not be a professional photographer spends ten minutes telling me why the camera he has in stock is the right one for me? What recourse did I really have? A magazine article, maybe, if I could hunt one down. Perhaps the store across town. But that’s it. Nothing when compared to the sea of information I have at my fingertips today online.
No, I’ll not only purchase online, but I’ll do my research there, too.
Right on, David. I’m a sailmaker, and I hate it when people pick my brain for hours to figure out what they need, then buy it for a few bucks less from Barbados or South Africa through an inmporter. Fortunately for us, some people still appreciate the value of service.
Hullo, my nickname is Joho.
>_>
its’ economic externalization, commonly accepted in board rooms considering offshoring, or exec compensation, etc…. extend costs to your competitors and commoditize.
unfortunately, it sucks, it violates relationship based sales, and if you want a flock of “transaction” based customers, and not loyal ones… there you go…
eventually companies will get smart, about this sort of practice.., and return to classic long term sales…
Parasite?
Newegg puts some truth in advertising and you decide they are a parasite?
The marketplace does not exist to be morally right, it exists to match buyers with sellers. Unless someone not telling the truth, all’s fair.
If a brick and mortar store wants my business, they better offer everything that exists online AND have a low price. Unfortunately, most stores don’t. In fact, most stores give you worse service than online sites.
Go try to get correct information about a motherboard or specific specs on a hard drive from CompUSA. It’s impossible. The most they can do is tell you if it’s in stock and they are often wrong about that.
David, of all people, I am surprised to see you defend the status quo. If the old line businesses don’t see the power of the web and change things to be better than it, then THEY DESERVE TO FAIL. A brick & mortar store better give me a damn good reason to drive there.
If anything is unethical, it’s the markup that that many stores use on products readily available on the net for much less. Try bringing in a price from a web site and getting Circuit City to match it. They’ll match prices from Good Guys, but not the web. They prey on the ignorance of consumers as to the prices on the web and take their money happily.
So again, who is the unethical one? Newegg, the ones that tell the truth, or the Brick&Mortars, who mislead people with loss leaders, high prices, and commission-based sales people.
I’m confused… Who on earth does their research in stores and then buys on-line???
Don’t most people research on-line, and then buy on-line or buy in stores?
Maybe I’m not understanding this right?
Chloe: I’d say, yes. Many people research online and buy in a brick & mortar store. Many more do both research and purchase online. Who would “research” in a store and buy online? The punk in the Best Buy knows more than I do sitting at my computer? Not too damned likely. My knowledge of digital cameras (to reuse an example I mentioned above) rivals that of the expert staff in the camera store, too, when I have net access.
The only reason to do “research” in a physical store is to check the actual feel of something – does that iPod fit in my shirt pocket? Are those shoes comfortable? That kind of thing.
Physical stores are good for fondling things and for taking something home TODAY. In my mind, that’s about it.
In halacha it’s call Geneivas Daas (loose translation: misleading the local store sales person) and I loudly applaud your condemnation of it.
Tim O’Reilly’s piece from May 2003 on this topic: Buy Where You Shop.
As he points out, it’s not the buying online that the issue, it’s the use of the physical store (its inventory, employees, free coffee, demo machines, air conditioning on a hot summer day, etc.) and then buying online that is objectionable.
Asking your bricks & mortar store, whether it’s a Mom&Pop operation or Circuit City, to match online pricing is inherently unfair. The physical stores can’t survive on the razor-thin margins that some web sites offer. We compete with web sites that don’t stock any inventory; they simply arrange for drop ships from the publisher or wholesaler directly to the buyer. That might be the future of retailing; it’s certainly efficient. Just don’t expect the physical stores to stick around for you to ‘shop’ in.
As a consumer, I don’t expect the local grocer down the street from me (yes, we do have a small, local grocer down the street!) to match Costco’s or Walmart’s prices, nor do I expect the local hardware store to match Home Depot’s. I make up my mind before I go into a store that I am planning on buying, not just shopping with the intent of getting the item cheaper online, or at another retailer. As a small-business owner, I hope that my customers offer us the same respect.
I don’t begrudge NewEgg for its business model; I do take issue with their advising potential customers to use physical stores as showrooms.
BTW: The local bookseller in Tim’s piece who tried to survive by buying books on her personal credit cards went out of business in 2004. She did aggressively discount in her store, but found that you can’t discount heavily *and* provide the level of service that her customers were accustomed to.
I think they took the concept from businesses in other niches, such as furniture or wear stores, where only offline research can give a good idea of what you are buying.