Keep prices consistent

Keep prices consistent

On mornings when there's milk in the fridge, I would pop a $1 Nespresso capsule into my coffee machine and start my day with a nice cup of latte.

I have been doing this for the past year and it has been great. Not getting my coffee fix at Spinelli or Starbucks is saving me about $20 a week. I even convinced a colleague, who downs two cuppas a day, to invest in a Nespresso machine and save a bit of money.

Recently, I read that several of Marks & Spencer and John Little outlets were closing. I also remember reading the news of Isetan pulling out of Wisma Atria. The reasons for the closures? There were a variety of them, but the one that stuck in my mind was that online stores and sales were affecting physical stores.

I read that the lower prices offered by online retailers is a huge reason for a shift in buying habits. And that many brick-and-mortar retailers are also seeing online shopping as their new retail approach.

Let me add another reason: Lack of consistency in pricing. Many people I know - and that includes many of my online-shopping-crazy friends - would gladly buy from physical shops here if prices were as low as those from where the goods come from. It just so happens that online stores are where such pricing exist.

Some of my female friends got excited when Chanel announced that it was standardising prices for its products across the world from this year.

This means a Chanel bag in Europe would cost the same as one in Singapore or the United States.

The announcement led to a drop in prices for Chanel items across Asia, but what it meant was that Chanel recognised that all consumers are equal and should be accorded the same prices.

I wonder what would happen if major retailers and brands were to do what Chanel has done.

Apple has done a good job maintaining consistent prices across its devices. The new MacBook will go for US$1,299 (S$1,800) in the US and $1,788 here.

Even if you take into account the recent appreciation of the US dollar, the price difference from the older exchange rate covers the GST charged here.

On the other hand, Dell is charging US customers US$899.99 for its new XPS 13, but consumers here have to pay $1,699 or US$1,233.

The same goes for the Xbox One, PlayStation 4, Monster headphones and a horde of fashion, electronic and toy items. It is no wonder savvy consumers are increasingly turning to online stores.

Physical retailers should stop labelling online ones as the bad guys. Instead, they might want to address the fact that many consumers are still shopping in stores, but just not with them.

On days when I am free, I like to head down to China Square Central on Sundays to pick up toys from independent toy retailers that sell Transformers and Lego toys far cheaper than Toys 'R' Us. How can they do so? Because their rent for the day is just $50 - for a table space to display their wares.

Many of us would load up on items that are cheaper than shops here when we travel overseas.

When I step into an electronics store, boutique or music retailer, I know that part of the prices I am paying are to cover the high rents that the business is paying for. But consumers did not ask for businesses to set up shop in the expensive parts of town. I suspect many of them simply want fair prices - like having a cuppa without paying for expensive hidden costs.

And for those who argue that Nespresso coffee is inferior to cafe-served coffee, they should know that some local eateries (and even cafes in Europe) serve freshly brewed Nespresso coffee.

Maybe Nespresso in Singapore can match the lower prices of Nespresso in Europe, to sweeten the deal for those considering a switch.

sherwinl@sph.com.sg


This article was first published on Mar 25, 2015.
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