How Independent Dealers Fight the New Price War
Amid the ongoing recession, getting a low price is now the consumer badge of honor. Beyond the ultra high-end, the luxury sale is, for the moment, toast. So is customer loyalty to retail and product brands. Furthermore, it is hard to define a product’s feature/benefit value amid price wars and commoditization. “It isn’t fighting Best Buy and Walmart,” NPD’s Baker said. “It’s fighting consumers’ notion that this year’s product does pretty much the same thing as last year’s or the year’s before.”
But when consumers do open their wallets to buy, they expect the red carpet treatment. “It’s a function of folks thinking ‘If I’m going to spend my money, the people I’m spending it with better show me they appreciate it,’” said Paul Sherman, general manager of Sherman’s of Peoria, Ill.
The retail challenge, especially for the service-savvy independent dealers, is to meet the consumer expectations of price and service while margins continue to erode.