Premium stores are milked, Harveys gets the cream: independent retailer

Exclusive by Patrick Avenell

SYDNEY: The proprietor of a specialist consumer electronics store in Sydney has spoken out today about the conflict that exists between the premium and mass market stores in this industry. According to Frank Di Bartolo from Pacific Hi-Fi, the specialist stores are being used by consumers, who then give their cash to the Harvey Normans of the world.

After last week’s story detail Harvey Norman’s retail pyramid, Di Bartolo contacted Current.com.au to offer a view of the market from the apex – the premium stores. His points make interesting reading.

“My experience is that when the consumer is in the market for better quality products, they will often milk the specialist for the information, then take advantage of the ‘deal’ from another store like Harveys,” said Bartolo. “Full marks to Gerry and the Harvey team, they have done a great marketing job!”

When asked how this situation could be changes, so that the supplier of the information is then the receiver of the purchase, Di Bartolo questioned the sell in strategies of the vendors. He thinks the specialist stores should be afforded the same pricing benefits for its role in the purchase process.

“The suppliers and manufacturers need the support of the specialty dealers to educate the market, yet they rarely afford the same price breaks to us as they give to a volume store like Harveys.”

 Another gripe Di Bartolo has regards the way products are being marketed to the consumer. He wants suppliers and retailers to work harder to create points of difference in the marketplace.

“As an industry, we have been very lax in creating a point of difference to the end user: there was a time where the question was ‘Is it a Sony, Sharp, Panasonic or some other brand?’, but today it’s just a large screen TV,” he said.

“The market sees Digital TV, but apart from the argument of SD vs. HD, the consumer and a lot of resellers have little or no understanding as to the point of difference that each brand or model really offers.”

“There is a really small percentage of consumers who actively seek out the point of difference; unfortunately most are blissfully unaware and so never really realise the real potential that some of today’s consumer electronics can deliver.”

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