What is the deal with New Zealand?

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Geektastic

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#1946467 25-Jan-2018 10:37

MikeB4: This desire to shop online and send our money to off shore Giants is going to have a huge impact on NZ and a very negative impact on our economy. In NZ over 260,000 are employed in retail, add to that all the support and associated businesses he risk of huge unemployment is very real and will impact all New Zealand. This maybe a case of be careful of what you wish for. The cost will greatly exceed the savings.

NZ needs to compete, not appeal to consumers to be treated like a charity.

They're on a hiding to nothing otherwise. They must find a way to offer more in return for charging more.

For example, start being a lot more flexible about returns, warranties and that sort of thing so they have a decent point of difference.

MikeAqua

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#1946476 25-Jan-2018 10:44

I find this frustrating too. I would like to support local businesses, because I want to see people keep their jobs in my town but sometimes the difference is just too high.

Personally I think the issue often isn't the retailers but the distributors.

In the US there can be multiple distributors, often free ground shipping among the lower 48 states and no sales tax for out of state orders. Although distributors have geographic territories, for retailers it's effectively one market and very competitive.

In NZ there is typically one exclusive distributor. The retailers, then in turn the customers get gouged. I've had retailers show me there wholesale price to prove its higher than the retail price for example in the US.

People bang on about parallel importing, but despite it being legal for years, I haven't actually seen that much benefit. Most of the parallel imported products I have seen I have seen is poor quality marketed under what used to be reputable brands. I often wonder if this dross is manufactured under a license to use a trademark for sales in less discerning markets?

Or there may be a reduced offering e.g. accessories like chargers not being included in the base price, or reduced volumes of fragrance or ...

Mike

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#1946488 25-Jan-2018 11:07

MikeAqua:

I find this frustrating too. I would like to support local businesses, because I want to see people keep their jobs in my town but sometimes the difference is just too high.

Personally I think the issue often isn't the retailers but the distributors.

In the US there can be multiple distributors, often free ground shipping among the lower 48 states and no sales tax for out of state orders. Although distributors have geographic territories, for retailers it's effectively one market and very competitive.

In NZ there is typically one exclusive distributor. The retailers, then in turn the customers get gouged. I've had retailers show me there wholesale price to prove its higher than the retail price for example in the US.

People bang on about parallel importing, but despite it being legal for years, I haven't actually seen that much benefit. Most of the parallel imported products I have seen I have seen is poor quality marketed under what used to be reputable brands. I often wonder if this dross is manufactured under a license to use a trademark for sales in less discerning markets?

Or there may be a reduced offering e.g. accessories like chargers not being included in the base price, or reduced volumes of fragrance or ...

Maybe models like Briscoes are the answer. Being able to reduce prices by 60% at certain times of the year does show what the real cost is. Maybe the key is to have more sales at lower profit rather then far less at higher profit.

MikeAqua

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#1946491 25-Jan-2018 11:18

Pumpedd:

Maybe models like Briscoes are the answer. Being able to reduce prices by 60% at certain times of the year does show what the real cost is. Maybe the key is to have more sales at lower profit rather then far less at higher profit.

I think that's how people get away with lower prices in bigger markets. Aggregate volume from higher volume, lower margin. Keeps the cash flowing and reduces inventory costs.

Many NZ retailers are working with low volume, high margin and expensive finance.

Mike

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#1946517 25-Jan-2018 12:01

MikeAqua:

Pumpedd:

Maybe models like Briscoes are the answer. Being able to reduce prices by 60% at certain times of the year does show what the real cost is. Maybe the key is to have more sales at lower profit rather then far less at higher profit.

I think that's how people get away with lower prices in bigger markets. Aggregate volume from higher volume, lower margin. Keeps the cash flowing and reduces inventory costs.

Many NZ retailers are working with low volume, high margin and expensive finance.

they won't last long sadly..but thats the world we live in. We need to treat NZ market the same as Aus...but can't see that happening with JA chipping away unnecessarily at Aus politicians.

wsnz

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#1946595 25-Jan-2018 14:14

MikeAqua:

Pumpedd:

Maybe models like Briscoes are the answer. Being able to reduce prices by 60% at certain times of the year does show what the real cost is. Maybe the key is to have more sales at lower profit rather then far less at higher profit.

I think that's how people get away with lower prices in bigger markets. Aggregate volume from higher volume, lower margin. Keeps the cash flowing and reduces inventory costs.

Many NZ retailers are working with low volume, high margin and expensive finance.

In the case of Briscoes, the margin on items is excessive outside of the sale periods, however during the sales margins are what they should be normally. NZ has a discounting ethos, and we're easily led by it to think we're getting a bargain (e.g. fuel discounts)

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Pumpedd

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#1946680 25-Jan-2018 15:22

wsnz:

MikeAqua:

Pumpedd:

Maybe models like Briscoes are the answer. Being able to reduce prices by 60% at certain times of the year does show what the real cost is. Maybe the key is to have more sales at lower profit rather then far less at higher profit.

I think that's how people get away with lower prices in bigger markets. Aggregate volume from higher volume, lower margin. Keeps the cash flowing and reduces inventory costs.

Many NZ retailers are working with low volume, high margin and expensive finance.

In the case of Briscoes, the margin on items is excessive outside of the sale periods, however during the sales margins are what they should be normally. NZ has a discounting ethos, and we're easily led by it to think we're getting a bargain (e.g. fuel discounts)

the world has a discounting ethos...

gzt

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#1946869 25-Jan-2018 21:10

MikeB4: This desire to shop online and send our money to off shore Giants is going to have a huge impact on NZ and a very negative impact on our economy. In NZ over 260,000 are employed in retail, add to that all the support and associated businesses he risk of huge unemployment is very real and will impact all New Zealand. This maybe a case of be careful of what you wish for. The cost will greatly exceed the savings.

Personally I'm not too concerned. We have other rising industries and other potential economies of service. Prepared food is massive and growing for instance.

Having said that, it's interesting reading about Amazon Prime in the USA being the main reason for even fairly large retailers exiting some areas of rural USA.

dejadeadnz

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#1947053 26-Jan-2018 11:13

MikeB4: This desire to shop online and send our money to off shore Giants is going to have a huge impact on NZ and a very negative impact on our economy. In NZ over 260,000 are employed in retail, add to that all the support and associated businesses he risk of huge unemployment is very real and will impact all New Zealand. This maybe a case of be careful of what you wish for. The cost will greatly exceed the savings.

On some levels, I actually agree that NZers need to stop focusing solely on price and reward people that provide real service. I also think that in some instances the "We are getting ripped off!" arguments are silly. As an example, I recently bought a Sony A6500 camera, which is available on Amazon for $1,400 USD. It retails here for $2,400 NZD and there's a $200 cash back going. Once you factor in the exchange rate difference and GST, the some $300 difference (pre-cashback) between NZ and US price is entirely reasonable. This especially when you take into account our smaller market and that your average camera shop (bar Camera Warehouse, which in my experience knows no concept of service) actually has to spend quite a lot of effort upon a customer to sell one of these.

But I have frequently seen lens filters in NZ costing 3 to 4 times their cost in the US and this is with delivery to NZ included. It's just impossible to defend this kind of disparity.

Another problem I have is the way most retailers here are absolutely unwilling to examine their silly models. I struggle mightily as a smaller guy who likes to (and needs to) dress in semi-classy dress shirts mixed in with a nice denim/chinos for 5 days a week to buy shirts that (1) are reasonably priced; (2) aren't either plain blue or white; (3) don't look like they have been made for people permanently going to Loud Shirt Days; or (4) aren't for aspiring male escorts working in some club. Your average mid-tier brand like Barkers (I know they have dreams of themselves being more but they are not one notch above mid-tier) and Country Road routinely charge $120 for a long sleeve shirt. I rotate about 15 shirts and essentially won't wear any shirt more than 3 times a month -- you would not believe how much difficulty I have in making the shirts from these two last a year, let alone two years, with this kind of wear pattern. Barkers has a well-known problem where their blue shirts fade quicker than a politician's memory -- if you go to a Barkers store and see their own salesmen wearing a blue shirt, you'll see that the collars are usually faded. I know a couple of these guys at my local store on a first name basis and we laugh about this every time.

So I only ever buy from Barkers when there's a 40% sale on, at their outlet stores, or when they massively reduce certain lines for even more. Most of the time when I walk past their stores when there's no sale on, they are practically empty. Operating a model where you rely on gouging people who are either too silly to wait for sales or don't have a couple of hundy to stock up on extra shirts in preparation for their inevitable premature decline is so insulting towards the customer. And I have no wish to keep subsidising their headlong rush into every mall.

Too often I find the debate on the state of retailing in NZ is marred by extremist positions on both sides, as well as a fundamental lack of reflection.

Geektastic

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#1947231 26-Jan-2018 16:13

dejadeadnz:

MikeB4: This desire to shop online and send our money to off shore Giants is going to have a huge impact on NZ and a very negative impact on our economy. In NZ over 260,000 are employed in retail, add to that all the support and associated businesses he risk of huge unemployment is very real and will impact all New Zealand. This maybe a case of be careful of what you wish for. The cost will greatly exceed the savings.

On some levels, I actually agree that NZers need to stop focusing solely on price and reward people that provide real service. I also think that in some instances the "We are getting ripped off!" arguments are silly. As an example, I recently bought a Sony A6500 camera, which is available on Amazon for $1,400 USD. It retails here for $2,400 NZD and there's a $200 cash back going. Once you factor in the exchange rate difference and GST, the some $300 difference (pre-cashback) between NZ and US price is entirely reasonable. This especially when you take into account our smaller market and that your average camera shop (bar Camera Warehouse, which in my experience knows no concept of service) actually has to spend quite a lot of effort upon a customer to sell one of these.

But I have frequently seen lens filters in NZ costing 3 to 4 times their cost in the US and this is with delivery to NZ included. It's just impossible to defend this kind of disparity.

Another problem I have is the way most retailers here are absolutely unwilling to examine their silly models. I struggle mightily as a smaller guy who likes to (and needs to) dress in semi-classy dress shirts mixed in with a nice denim/chinos for 5 days a week to buy shirts that (1) are reasonably priced; (2) aren't either plain blue or white; (3) don't look like they have been made for people permanently going to Loud Shirt Days; or (4) aren't for aspiring male escorts working in some club. Your average mid-tier brand like Barkers (I know they have dreams of themselves being more but they are not one notch above mid-tier) and Country Road routinely charge $120 for a long sleeve shirt. I rotate about 15 shirts and essentially won't wear any shirt more than 3 times a month -- you would not believe how much difficulty I have in making the shirts from these two last a year, let alone two years, with this kind of wear pattern. Barkers has a well-known problem where their blue shirts fade quicker than a politician's memory -- if you go to a Barkers store and see their own salesmen wearing a blue shirt, you'll see that the collars are usually faded. I know a couple of these guys at my local store on a first name basis and we laugh about this every time.

So I only ever buy from Barkers when there's a 40% sale on, at their outlet stores, or when they massively reduce certain lines for even more. Most of the time when I walk past their stores when there's no sale on, they are practically empty. Operating a model where you rely on gouging people who are either too silly to wait for sales or don't have a couple of hundy to stock up on extra shirts in preparation for their inevitable premature decline is so insulting towards the customer. And I have no wish to keep subsidising their headlong rush into every mall.

Too often I find the debate on the state of retailing in NZ is marred by extremist positions on both sides, as well as a fundamental lack of reflection.

Another glaring photography related pricing issue is SD cards. The cost of them in NZ versus the cost in the USA is simply insane.

The fastest 128Gb Sandisk card is the Pro C. It costs USD 340 at B&H - NZD 460.

In NZ? $848...!!

dejadeadnz

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#1947286 26-Jan-2018 18:29

Geektastic:

Another glaring photography related pricing issue is SD cards. The cost of them in NZ versus the cost in the USA is simply insane.

The fastest 128Gb Sandisk card is the Pro C. It costs USD 340 at B&H - NZD 460.

In NZ? $848...!!

My A6500 only makes use of UHS-1 cards but I had to laugh the other day when I was browsing JB Hifi at Sylvia Park. It was unbelievable how many Sandisk memory cards of different speeds and memory capacities they had in stock. Each permutation had at least 20 cards on display. Their 64GB Sandisk UHS-1 card was double the price of Ascent (cheapest on Pricespy - it's a highly reputable PC store that would have shipped the card to me at no charge as well). Do these idiots not realise that everyone has a smartphone on them these days?

I would have more sympathy for retailers here if they would actually make SOME effort at stock management, stock diversity, service, honouring the law (e.g. look at Noel Leemings' increasingly notorious reputation for CGA non-compliance), and general cost control. I often browse Whitcoulls to see what new books are out that I can buy for 1/3 to 1/4 the price on Amazon on my Kindle. You wouldn't believe how every Whitcoulls branch would constantly have people just randomly loitering around doing nothing. We frequently go to Sylvia Park on Sundays at around 6pm (an hour before the mall closes). Hardly a soul walks into Whitcoulls during this time in my experience yet they always have at least 4 people in the store doing nothing.

Why should I subsidise this?

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