Is A ‘Just Looking’ Fee A Smart Business Decision?By: Chris Crum - March 31, 2013
Brick and mortar stores face a lot of challenges in competing with the Internet. We’re living in an age where you can get just about anything you want from somewhere on the web, and even better you can easily browse multiple sellers, and find the best price. It’s been a great thing for consumers, but not for all businesses. To complicate things even further for brick and mortars, the rise of smartphones has made it easy for consumers to walk into a store, browse the inventory, and comparison shop right from within. Stores risk losing customers to competitors before they’ve even left the store.
Is it smart for businesses to charge customers for browsing without buying? Let us know what you think in the comments.
This isn’t necessarily a new topic, but it’s drawn a lot of attention this week, thanks to one store’s policy and one person’s contribution to reddit.
Celiac Supplies, a Brisbane, Australia area-based gluten free shop, has become a viral phenomenon, but not in a good way. As previously reported, reddit user BarrettFox posted an image of a sign the store posted on its front door, and it quickly became the subject of a great deal of mockery on and off the social news site.
The sign reads:
As of the first of February, this store will be charging people a $5 fee per person for “just looking.”
The $5 fee will be deducted when goods are purchased.
Why has this come about?
There has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else.
This policy is in line with many other clothing, shoe and electronic stores who are also facing the same issue.
BarrettFox’s image came under the title, “When they open tomorrow I’m going to see how many times I can walk in and out without paying the toll.”
Comments from redditors include:
“This store seems desperate to go out of business.”
“The thing that confuses me is: How is this allowable? Someone walks in, looks around, decides not to buy anything and starts to leave. They berate them until they pay? What if they hadn’t noticed the $5 fee sign and don’t have any money on them? If it was me, I’d say “Screw you.” and not give them a dime, walk out and refuse them any future business. They are asking to go out of business.”
“I don’t have my glasses. Does it say ‘Going Out of Business Sale’?”
“‘Introducing the new loyalty program! Every $100 you spend you get 20% off your next purchase’ Fixed that. I’m a small retailer, I have to compete with the internet, but many of my customers come to me because I make my store a positive and enjoyable experience. Most of them don’t even want a discount.”
Some, on the other hand, see where the store is coming from. One user commented:
“Eh, I’ve been to a store before and then gone to Amazon to see their price. Amazon had a higher price but it was only by a buck or two, certainly more even after tax was applied. But I was already home, and it’d be delivered to my door, so I just ordered through Amazon.
Now I have a smartphone and just check the price in the store. Also, now Amazon charges tax.”
The store’s owner assumes people are leaving without buying anything and going to buy products at a supermarket chain or online. AdelaideNow reports:
Owner of the gluten free produce store, Georgina, says she resorted to putting up the sign after spending hours each week giving advice to people who leave empty-handed.
About 60 people a week would go into the store, ask questions and then buy the same or similar product at a supermarket chain or online.
“I’ve had a gut full of working and not getting paid,” Georgina, who didn’t want her surname published, told AAP.
“I’m not here to dispense a charity service for Coles and Woolworths to make more money.
She has reportedly turned some people away, but has had some willing to pay the toll.
Perhaps one alternative for the store would be to sell products online (they have a site, just apparently not one that sells products), and advertise that site on a sign on the door.
By the way, this story comes from reddit’s WTF section.
A recent Google study found that 51% of shoppers would esearch online and then visit a store to purchase, while 17% would visit a store first and then purchase online. Another 32% would research online, visit a store to view a product, then return online to purchase it.
“In short, the shopper’s journey looks less like a funnel and more like a flight map, and the lines between online and offline shopping experiences are blurring,” said Google Retail Industry Director Todd Pollak.
Do you think it’s a good idea to charge potential customers for browsing without buying? Let us know what you think in the comments.