Page 25 - ARUBA TODAY

BUSINESS Friday 28 June 2019
A25

Cut-rate prices online: shoppers' win, businesses lose

By JOYCE M. ROSENBERG North Carolina.
Associated Press "I am constantly aware of
NEW YORK (AP) — A bride- the marketplace and how
to-be looking for a gown my pricing matches up to
online can find dresses with competitors as well as what
trains and lace for well un- the market will bear," Cor-
der $300. Go into a local bett says.
bridal shop, and the aver- But Corbett has also
age price will stretch into learned that clients who
four figures, taking some balk at her rates and turn
shoppers by surprise. to one of her competitors
That kind of price disparity were likely to be difficult or
puts small businesses at a short-term customers. She
big disadvantage. Wheth- finds that despite prospec-
er they sell to consumers or tive clients' quest for lower
to other companies, own- prices, those who are the
ers struggle with custom- most loyal are often willing
ers' perceptions of what a to pay more to get good
product or service should service.
cost, even if those expec- Customers at Gerald
tations are unrealistic. On- Olesker's lighting company
line competition — not just include wealthy homeown-
from Amazon, but from re- ers who can afford to pay
tailers and service provid- high prices for lighting sys-
ers of all sizes — can force tems, but, he says, "they are
owners to keep absorbing just as careful with those
their rising costs rather than dollars as any wise consum-
pass along the increases to er." And Olesker, owner of
customers. The problem is ADG Lighting in Agora Hills,
exacerbated by the Trump California, has seen those
administration's 25% tariffs In this Friday, June 21, 2019, photo Ann Campeau,, right, owner of Strut Bridal, fits a new dress on customers become more
on thousands of imported inventory manager Stefanie Zuniga at her shop in Tempe, Ariz. frugal during this quarter as
items. Even wealthy cus- Associated Press they see tariffs driving up
tomers balk at the higher prices.
prices. U.S. retailing industry have be aware of what their IT sales and profits. "There may be a bit more
Cut-rate prices on websites become more frequent needs and goals are, and "We will often spend weeks tolerance for price fluctua-
that sell wedding dresses over the last decade be- whether they will get the crunching numbers to de- tion among wealthy con-
direct from China put pres- cause of online compe- service they want from a cide if we should adjust our sumers but there is a limit
sure on Ann Campeau, tition. According to the big player, says Goldstein, prices by just a few per- and when we reach that
who owns four bridal shops. study, the amount of time owner of New York-based centage points to keep up limit, it impacts us," he says.
She has had customers merchandise was sold at OnsiteIn60. In such cases, with online competition or To preserve his profits,
come in expecting to get regular prices, excluding he has to explain in detail stay where we are and ul- Olesker is doing more work
a dress at a price similar to sales and temporary dis- why they're better off pay- timately lose business," says for corporations. While
what they saw for a low- counts, fell to approximate- ing a higher price for his Will Munroe, director of e- he has had a good busi-
end gown online. ly 3.65 months during 2014- kind of service. commerce for Rug Studio, ness with hotels, he's now
"They think, if I go to a store 2017 from 6.7 months in "You can't make a busi- a retailer that operates branching out into lighting
with a $500 budget, I can 2008-2010. Over that time, ness decision if you haven't online and at four stores for retailers.
get what I want. That's not online and mail order sales been educated properly," in Texas. He's found that "I have to have another
even my wholesale cost," exploded, rising to a 14.5% he says. many online shoppers pe- revenue stream," he says.q
says Campeau, whose share of retail sales from The internet, by making so ruse the prices on Google's
shops include Strut in Tem- 5.5%, according the Com- much information avail- shopping site and sort the
pe, Arizona, and Long merce Department. able, has given consum- rugs they find by price.
Beach, California, and Gar- To survive, small businesses ers and business customers "If we aren't the lowest
net & Grace in Whittier and need a way to differentiate more power, says Charles price, then it is very likely
Hayward, California. themselves from competi- Lindsey, a marketing pro- we'll lose that customer,"
Bridal shops sell dresses at tors who have dramatically fessor at the University at Munroe says.
the manufacturer's sug- low prices; for example, Buffalo's School of Man- The retailer has also
gested retail price, similar to bridal shops can turn buy- agement, part of the State changed its merchandise
prices at auto dealerships. ing a wedding gown into a University of New York. mix, offering more rugs that
And since many gowns are special occasion. "It has changed not only can be used indoors as well
made in China, they're be- "We provide an experience the way we shop, but also as outdoors — while they
ing hit by 25% tariffs. that some women still val- the way we think about tend to be cheaper than
"I don't think our indus- ue," says Campeau, who's the marketplace and busi- strictly indoor rugs, their
try can afford to raise our been in business for nine nesses and how consumers quality has improved in re-
prices without losing most years. interact with businesses," he cent years and they attract
of our customers to online Prospective clients have says. "B2B (business-to-busi- buyers who want a lower
sales," Campeau says. told Akiva Goldstein that ness transactions) is being price.
A study published last year big companies can quote affected in many cases by Pricing is an ongoing bal-
by Albert Cavallo, a Har- them better rates for infor- the same dynamics." ancing act, says Nikki Cor-
vard Business School mar- mation technology servic- The shift in power forces bett, owner of Precise, an
keting professor, found that es like his, and within min- business owners to develop editing and proofreading
price changes across the utes. But clients may not new strategies to preserve service based in Climax,