Miele executive says online retail will not displace physical stores

Importance of experience.

In-store concepts will never be displaced by an online business because online can never give customers the feel, smell, touch and face-to-face discussions that a physical store can, according to Miele executive director and co-owner, Dr Reinhard Zinkann.

“Bricks-and-mortar and online go well together if they are managed well. They do not exclude each other if they are managed well,” Dr Zinkann told Appliance Retailer in a recent interview.

“We like to bring in our customers to demonstrate our appliances, cook with them so they understand what it means to be an owner of a Miele product. It is very hard to do that in the online world. In the past, customers used to open a page with 20 washing machines that would all look the same and the only differentiation was the price.

“People don’t understand why they would pay for Miele but it is the quality and performance, which is something that needs to be experienced. That’s the challenge we have and how to do that in the online world. How do we bring an experience into an online environment? The good news about Australia is that from a retail point of view, retailers here understand how to create experience and how to communicate brand value, much better than many other countries around the world.

“Australia is in a really unique position and it offers a number of opportunities if they handle it correctly. If they just use online for pricing then it won’t work. They have to invest. We cannot take a printed page from a catalogue and just put it online. It’s impossible, it won’t work.

“When online business started, there were many small entrepreneurs who thought they could use online simply for trading a product at a very, very slim margin so they only sold on price because they had no costs. They were sitting in their living room on the computer but all of these businesses vanished. They are gone. I remember some of them but we all as an industry looked at and disliked them completely. They had no chance of surviving.

“Customers want to have a certain experience. Online and offline each provide a different experience. They want special treatment and exposure. So if online business is just a price-driven business, it’s the wrong approach.”

Miele Australia managing director, Sjaak Brouwer added, “I think there are some good examples in the market where the retailer takes the lead in transforming stores into an experience and have the interaction between online and offline. There is definitely a good future for Australian retailers in the new era of online but you have to change and develop.”

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