September 18, 2017
By Mike Lovett
As a museum store operator, or as a merchandise maker or distributor, you know that the ease of online shopping is a double-edged sword. Sure, it’s convenient — but for business owners and operators, the underbelly of counterfeited products, price discrepancies, and showrooming can quickly replace the thrill of finding a sale with the disappointment of losing one. The main culprits are usually on Amazon or eBay, selling the same product that you are for less.
These retail giants hijack MAP (Minimum Advertised Price) pricing, leaving you with inventory that’s difficult to move because you’re selling at the actual price. Your overhead costs don’t allow cutting margins to compete. And if sales continue to decline, you’re less inclined to take buying risks that might differentiate you and pay off down the road.
We call this scenario L.O.S.E. – the Loss of Online Sales Effect.
Admittedly, L.O.S.E. is a problem that we at The Grommet face as well. This may seem strange coming from an online retailer, but we consistently fight price discrepancies and markdowns to remain competitive. As do our Makers.
So what are we doing about it? Our own Business Intelligence team actively monitors price differences and slashed prices on those big-box e-retailers and works to ensure Makers (and thus you) are not losing control of price points. We’re all equally invested in price protection. This can seem like a daunting task – but you don’t need to monitor every item you sell – only the ones you suspect will wind up in a markdown position.
We are also trying to prevent showrooming—the practice of customers walking into your store, seeing, holding, and testing the product, and then buying it cheaper online. We ask our makers to create videos and stories for each product. These provide relevant information that can create a connection with customers and remove the need for them to look for the same product online. These stories are the vital connection that your customer makes with the product in front of them – and supports the compelling urge for them to acquire it from YOU!
What are other MSA members, vendors and institutions, doing to combat L.O.S.E. — and the hijacking of MAP pricing? You need to tailor your own retail program to combat these L.O.S.E. / lose situations. Building awareness, community, and savvy on your own behalf will help YOU make the sale!
Mike Lovett is the Marketing Specialist at The Grommet. At The Grommet they find unique, undiscovered products and help them succeed. The Grommet Wholesale is a platform designed to bridge the gap between Makers and Main Street (and Museum Store) Retailers making it easier than ever for distinctive products to find their way to local shops. The Grommet has been a member of MSA since 2014.