Would charging customers for trying on clothes save retail?
Miguel Nicolás
08/10/2019
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The suggestion made by Castilla and León office has created controversy. Will charging customers for trying on clothes save retail? Let´s analyse this idea.
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On September 19, 2018, the Economy and Finance office in Castilla y León proposed the idea of charging customers 1€ for trying on clothes at physical stores if they do not buy them.It is said that the idea was to "promote competitiveness" of retail market against e-commerce, because, according to the counsellor, a big number of customers try on clothing at physical stores and then bought at a cheapest price on the internet.This proposal brought on controversy in and out of the network. And it could be worse, because it summarizes how many retail entrepreneurs feel as they do not know how to deal with the digital reality they have to coexis with; But, at the same time, it can be a desperate and even absurd measure, as it tries – as it already happened with the idea of protecting video clubs from digital downloads –stemming the tide.Would forcing customer to pay for trying on clothes save retail?From the start, you have to think that the rate charged would be ridiculously small. By just offering €1 to the merchant, it will never make up for the sale loss. Also this measure chases that customer away who has come in and, although he/she did not the garment, at least has shown interest in it.Is penalizing the customer for that interest a winning strategy for the merchant? Let's see the different sides this problem presents.
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The problem of eCommerce for retail
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eCommerce has grown consistently for years around the world. In the case of Spain, we are talking about a revenue in what goes from the year of 15,109,000,000 euros. This represents 13.22% more than the same period of 2017 and, according to the forecasts collected by Statista, the data say that in 2022 it will have grown another 10%, reaching 22 billion euros.This, which is objectively positive for industries, generates some tension in the retail sector, which was first hit by the economic crisis in 2007 and, since then, even having returned to positive figures, is very far from the strength of eCommerce.
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If this situation is extrapolated to the reality of what happens internationally, where it was already talked about the retail apocalypse (in a rather exaggerated way), the national retailers worry even more.It is true that the golden age of shopping malls of thousands of square meters is behind and that, only in the United States, it is estimated that since 2010 have closed 12,000 stores, but it is worth studying why.
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The digital transformation that never comes
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... Or halfway. Considering cold data, it is easy to assume that the internet is guilty of all our harm. However, the easiest thing does not imply that it is true or that it has no solution.If you are a retailer, you have two options: blame the internet for your sales fall, or try to use internet to improve the results of your business. And without doubt, the smartest position is to see the possibilities that internet has for your business and find the opportunity where now you only see crisis.This is the so mentioned Digital Transformation, that at this level, and in a quite summarized way, we could say that it consists of integrating the online channel into the retail strategy itself.That is, we would no longer talk about retail and eCommerce as two separate realities, but everything would be ' Commerce ', and the only thing that would change would be the means through which sales would be completed.
As we have said many times, one more step towards omnichannelity.To carry out this Digital Transformation, entrepreneur need to know, on the one hand, all those things that must do all retailers to sell online and, on the other hand, the need to migrate their processes and even their structures towards other technologically more efficient and advanced.It may seem a challenge with many implications, but the truth is that there are tools to do it swiftly, without complications or needs of advanced technical knowledge.As we are talking about 100% analogue companies, there are no departments or specialized staff that can implement the creation of an online store, so you end up opting to ask for quotes to different agencies.As there is no one who can evaluate with guarantees these quotes from a technical point of view, there is a great insecurity which usually affects this process of Digital Transformation or jump to the network, putting it off – sometimes even indefinitely. -
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What options does a small retailer have to integrate the internet into its business strategy? Fortunately, today there is a technology called cloud eCommerce software, which is not about buying the technology itself, but accessing to it.In this way, an entrepreneur can access this technology that will allow to create his/her online store very easily and without any programming skills, because what characterizes these eCommerce softwares in the cloud is that they incorporate predesigned templates and a default configuration from which you can customize in a very intuitive way.This is the philosophy behind Oleoshop: the fact of making access to electronic commerce without big investments of time and money possible for small entrepreneurs and retailers.It is also a scalable software, it will never remain small as you grow because its storage capacity and data transfer is adapted to your needs. And all at a very competitive monthly price.
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Let´s go back to changing room fee
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Understanding the problem of retail and its need to recover the costs associated with the activity, it is clear that charging customers €1 for trying on clothes will not stop showrooming (try off line and buy online): In the worst case, what is going to cause is that people stop going to the stores and, at a lower influx, many more problems for conversion (for obvious reasons).
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The solution can be found in the aforementioned Digital Transformation. If we have a solid omnichannel strategy in retail, we can get most out of it.To begin with, generating that influx we talked about in a bidirectional way, with users who go to the physical store referred by the website and vice versa; We can also implement complex loyalty strategies, reduce logistics costs with store pickup, create synergies between both channels, and ultimately, increase our business opportunities.Retail should start shifting gears. The internet is not a threat, but an opportunity for retail. Any conversion adds, regardless of the channel in which is produced, and any action that enhances the customer's experience benefits the brand. And certainly, offering customers the possibility to buy online too is one of those actions.
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What do you think of the idea of charging customers for trying on clothes? Do you think this is a beneficial measure for retail or it goes against? Do you have anything to add to what we have said? Come on, join the discussion.
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Images | Fotolia, statist, Unsplash.