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"Customers rarely buy on price alone. The web offers convenience and the ability to compare offers at the touch of a button."

 

PETER BULL, PA MARKETING expert

Can fixed pricing save bricks-and mortar retailers?

Peter Bull

Financial Times

4 April 2012

 

THE PROBLEM

A unilateral pricing policy, launched this month by groups such as LG, Panasonic, Samsung and Sony, threatens to punish retailers with a withdrawal of goods if they sell them below a fixed price. Bricks-and-mortar retailers hope it will help them combat fierce discounting by online retailers such as Amazon. Will it? Or are they losing out because of more than price?  

THE ADVICE

Customers rarely buy on price alone. The web offers convenience and the ability to compare offers at the touch of a button, whether in the home or, increasingly, via smartphone. As restrictions on price and supply will always be temporary, and the rising tide of internet suppliers can only be held back for so long, bricks-and mortar retailers must develop new ways to attract and retain their customers.
For companies such as John Lewis, for example, the proposition also encompasses excellent in-store service and after-sales support. If traditional bricks-and-mortar electrical retailers are to achieve similar longterm sustainability, they must consider a radical change to their business model.

Peter Bull is a specialist in marketing and branding at PA Consulting Group.


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