Retailing confusion

I am not an idealist, and very little of what I see is ever considered optimistic. And I still find the acts of retailers just horrid. Since I come from a retail background, so I understand the pressures they face but I know they how desperate they can get to push the bottom line.

But I can still accept the practices I keep seeing. And as much as I rant I can’t seem to do them justice. My understanding of an good retailer is that offers quality products and backs it up with quality service at competitive prices. These are the three things that make a retail chain successful. But retailers continue to forget that.

I digress. I will boil it down to two examples.

The first is the iPhone. Etisalat and Du have launched this product in the UAE market with aggressive pricing. And when I first saw those numbers, I thought that grey market prices would drop. I knew they won’t be able to match those delivered by the two telecoms. But they would at least try to close in. But the prices continue to sell at the crazy prices they did before the launch. As of this week, I found that Tarsam was selling the iPhone 3GS 32GB for AED 4,000 (compared to Etisalat’s AED 2,800), and Sharaf DG was selling the iPhone 3GS 16GB for AED 3,400 (compared to Etisalat’s AED 2,400), and an iPhone 3G 16GB for AED 2,400 (which has been discontinued).

Now I look at those prices and I can’t help that the customer is being conned. I can understand some variation in prices. For example, Du’s price is slightly higher than Etisalat’s, but it offers you a very good deal in return. But these are cases where the difference is neither slight nor the added service significant. And what scares me is that the majority of shops are selling at these prices, and only a handful of shops are selling at the official price. So how is a customer going to come to the right conclusion?

My second example is about an audio cable. I was looking to connect my iPhone to the AUX connection in my car. I tried to look for it in Plug Ins and was surprised how hard it was to find it. I was sent to about five sections to finally found what I am looking for. the only option available is a Monster cable retailing for about AED 90. My wife was surprised at this point that after a long treasure hunt I decided not to buy it. “Isn’t that the cable you want?” I promptly went to the hypermarket nearby, walk directly to the cable sections and find the cable I want for AED 6. I show the cable to my wife and tell her “this is why I didn’t buy it”. Now I won’t go into the pros and cons of premium cabling. And that is a reasonable price for a Monster cable. But it seems to me that, again, the customer is being conned into buying something that really isn’t right. This retailer carried mainly two cable brands, Monster and HP, with the Monster getting the lion share in retail presence and distribution. This is probably due to the margins retailers enjoy if they sell it. But doesn’t it make sense to give the customer another choice? Something that isn’t a premium cable?

As humans, we tend to evaluate things by comparison. Both of the above examples give the impression that these prices are the norm. And a buyer that does his or her homework, is still very likely to come up with the wrong results. And this is what bothers me. I can’t help but fear that someday, I too will fall for one of these traps. Because after all, retailers are not above such an act.