How Much Damage Has the Internet Caused to Local Businesses?
Back in the spring of 2010, I was paying my Verizon bill online when I noticed an advertisement for new cell phones offered by Verizon Wireless. I am very satisfied with my current cell phone (Samsung Glyde), but I have had this model for over two years now, and I thought that perhaps I was due for a change. I browsed through the phones and found one that I liked (Samsung Reality).
My criteria was simple: I do not want to get a smartphone because I would have to shell out an extra $30/month for a feature that I would rarely use; secondly, I did not want to have to pay anything extra for a new phone since I am still satisfied with my current one; thirdly, I wanted a phone that had more features than my current model.
The Reality bested the Glyde in that the phone had a larger screen, 3.5mm headphone jack, and could transfer photos/videos without having to remove the memory card.
The Reality looked nice online, had great reviews, and would cost me nothing ($50 credit for renewing my contract, plus another $50 off for ordering online – thus covering the $100 cost). But before purchasing the phone, I wanted to hold the device in my hands and get a feel for how the phone works.
I searched for the closest Verizon Wireless store to me, and ventured out on my lunch break. There were only two sales associates in the store, and no customers at the time. Both associates were very friendly, and answered all of my questions honestly. They also appeared to be very knowledgeable on the new phone (introduced about two weeks prior to my visit).
However, they said that they could not give me a $50 instant credit like ordering online. Instead, I would have to fill out a form for a mail-in rebate, which would come in the form of a Visa debit card (also $50). I balked at first, but when they said that I could use the card towards my Verizon bill, I obliged. The sales associate even sweetened the deal by giving me 50% off some accessories (just some additional USB charging cables, which are normally $10 each).
She began to ring up my order and informed me that the retail cost of the phone was $130. Upon hearing this, I mentioned that the device is only $100 online, and could she do anything to level the playing field. She said that she could not, except to offer discounts on accessories (which I needed none).
At this point, I felt awful. She spent a good thirty minutes with me (albeit there were no other customers in the store during that time, so her opportunity cost was zilch), and I was not going to buy anything from her. She explained to me that they cannot compete with online, and that they have to earn something as well. I told her I understood, and respected that she needs to get paid and the business needs thrive. Had the store price been only $5 or $10 above the online price, then I probably would have gotten the phone then. But $30 is a bit much, especially since I can order it online and have the phone arrive at my house the very next day.
I thanked her for time and left with nothing but a guilty conscious.
This scenario is probably all too common among retailers. However, I have seen at places like Best Buy where the online price matches the store price. Granted, I realized that this particular store was not an authorized retailer, but charging a 30% markup will not bode well for future success.
Should I feel guilty?