@Brons - Thanks for a considered and valued opinion. The only real points of difference are:

* I don't consider myself to be a retail expert. It is too multi-disciplinary and there are too many unique factors in each business. I am trained, and experienced in many facets (more than many I suppose, but I still don't have all the answers - just a good system for finding them.)

* How to respond to the online tsunami is the other difference.
I don't want to promote my site/myself; but if you have not done so, please watch this video. http://www.ganador.com.au/retailsmart/2011/11/7/customer-experience-the-movie.html

In the first half I tell the story of a bottle-shop experience. I use that to illustrate the difference between customer service and retail theatre and customer experience.

I also have a shoe store example which you may enjoy.

What you are describing as your response is not the same as my definition of customer experience.

The problem I have in a short article like this, is that I cannot qualify everything and provide context and definitions for everything so it can be misinterpreted.

I am not advocating retail theatre or customer service improvements: those are given already, if you don't do that, you are not even in the game.

The best I can do on a blog is to say 'have an innovative strategy' because that is what is true for everyone reading it.

The problem as you (and Miles) point out is that is generic. (It would be wrong to say it is not practical, but it does lack the specific of the individual case.) This post was NOT a case study in CXD - maybe I should do one.

The innovative strategy that I would advocate is that shouldn't just compete with online, but you should be online. But not just that, also be where your customers are. This may include pop-up stores at events for instance. And online is not just an eCommerce site, but FB and a FB store, Ebay. And Pinterest.com. And have an App. And, and, and, ....

Retail as a store-only business won't be viable for many categories of retail. (See, it is different for everyone.) But I would say sports shoes business is one of those.

And finally, I am not too concerned about the value gap per se; I believe prices are converging between online and offline and the retailers who survive will have successfully bridged the gap in the next few years. (Except where certain constraints in a market will allow some price arbitrage.)

I am more concerned whether retailers "get" the fact that the traditional business model is being disrupted.

Thanks again.

Hi Dennis,

Without wanting to come across as to negative, I find a lot of industry experts are taking a similar position as you on this issue. I think everybody knows by now that we need to find a way to offer something in store to make up the price discrepancy between in store and online. In my particular flavor of retail (sporting goods) due to the immense buying power of the major players in the US and Europe, you might find a top end running shoe retailing for $160 vs $240 RRP in Australia (which we pay an appropriate price to our supplier) the $160 price of course is available online. So obviously I am painfully aware that I need to make up that difference, and to a certain extent the historical advantages of bricks and mortar experience make up for that value discrepancy; these advantages being security of transaction, instant reward of purchase, after sales service and warranty, and customer service and advice.

However, with the gap between our price and the price of online overseas competitors widening, even doing the above very well (NPS and over 30% growth in our footwear division indicates we are doing the bricks and mortar thing better than all of our local direct competitors) we are still finding we are losing sales to online, and being used for fitting and customer service before our customer buys cheaper. We have a loyalty program offering incentives to re-shop which is both generous and popular, offer money can't buy experiences through member competitions and our own online presence. None of which can always do enough to bridge the $80 value gap.

Every expert tells us the question, how do you bridge the value gap? I would love to read some real practical answers because my opinion is that this position is borderline insulting to a lot of retailers out there who feel it's unrealistic. Expert opinion offers what you served up to Miles John. I think the answer is the opposite, there is at times to much of a value gap to bridge, you don't need to increase your retail "theatre" (whatever that is when it's at home) you don't need to invent a new strategy, you don't even need to start taking more risks. You just need to do what good retailers have been doing for the last twenty years:

Know what the right product is, have plenty of it, have it where the customer can easily find it, be price competitive with other bricks and mortar, have trained staff selling it to them in an efficient and friendly manner. You dont need to compete with online, yes they are impacting our top line sales but it's just made for a crowded market by taking the price obsessed consumer away, you just need to increase your share of the remaining 90% of customers.

This is an interesting 'conversation', so where do I begin...

@michael - thanks

@charlie - I appreciate your opinion; however the point that I am trying to make in this piece is:

Option A: Pair of Shoes + In-store experience = $100
Option B: Pair of Shoes + Online = $70

People may say that they go for option B because it is cheaper.I am saying that People are probably choosing Option B because they DO NOT equate In-store Experience + $30.

I say that in the context of most commentators (and retailers) all agreeing that the future survival of Retail = delivering a great experience.

My 'solution' offered (albeit general enough for this forum) is that we have to be proactive and smart about fixing that part of the equation.

You obviously disagree - and I accept that.

@annoyed: Shopping centre rent may be an important issue, maybe the most important issue and I accept that you think it is. It happens to NOT be the topic I am writing about.

I am disappointed that you perceive me as attacking retailers though, so I would like to correct that view: I am a student of retail, that is the best I can say and I love retail. (With a surname like 'Price' it is probably nominative determinism at play.) I make my observations to stimulate thought and conversation; and if my writing skills are so poor that that is seen as an 'attack' then I will certainly pay attention next time.

And finally, you say the younger consumers are too tech-savvy to pay a premium for 'service'. I am suggesting that the premium should be paid for an experience (not service) and I explicityly say that the service of 'trying on' or 'showrooming' is in fact a case in point that you cant charge for the service. There is a huge difference between service and experience.

I would argue that when a consumer is prepared to pay $20 for CD but $200 for a concert, it proves the point that consumers value the experience more than anything.

@miles john
To some degree I actually agree with you. It certainly SOUNDS like glib advice. However:
1. Create a smart strategy.
2. Re-designing your customer experience.
3. Re-training yourself and your staff.
4. Take a few risks.

That may not be specific enough for you, but given that this is a blog (not a consulting proposal or a research project) it may be somewhat vague on detail, but it is written at a level that would be appropriate to ALL readers.

Especially if you read that in the CONTEXT of what I said earlier that the existing 3 approaches are unlikely to yield good results, so I am suggesting you explore the alternative.

I think the irony may have been missed because I DO say that the answer won't be found in blogs. (And, sincerely, I am not returning the sarcasm, I am offering you a considered opinion based on being involved in the online world since 1997.)

But if you go here: http://www.ganador.com.au/newsletter/2011/6/10/readthinklearnlaugh-july-2011.html

you will find a lot of examples and tools and resources to get you started. It is my 'retail journal' for newsletter subscribers and the type of forum where I can go into more detail.

And for the record, when I suggest there are three things that WON'T work; in my book that counts as legitimate advice.

Dont you love these articles. The 4th way. Sounds like wise words from the guru but when you drill down there is not one solid example of what the 4th way entails. "Create a smart strategy", "redesigning of your customers experience"....ok how about giving us all a hint with one example oh wise retail guru?
I'm clicking on the next blog....

Dennis,
Your style of continually attacking the retailer in their efforts to trade is boring these days. How about facts from now on.
You sound like a Centre Manager blaming everything else except their own Centres traffic and dollar spend. Whilst it may not be the Centres fault alone for the demise in retail in store spending, it is the product/space that they sell which is becoming more and more unproductive. This is not reflected in the rents being charged across the retail environment and won't be for a while longer yet. Here is an idea, how about our Government legislate an exit clause in every lease in this country so if your not doing well, you can manage your exit without too much collateral damage. As it is today, you must suffer considerably to get out of a lease in which you are hemorrhaging. Oh no! I hear you say. The Centres losing their guaranteed return on their shop space irrespective of the performance of the Centre. This exit clause would guarantee a level playing field when negotiating rents and allow the real value of rents to finally occur in Australia.
Generation x,y and beyond are too tech savvy to be drawn in to pay a premium for service. You don't do it and you are a Baby Boomer. I have never spent so much on line and I am gen x. The retail shops are a guarantee to pay more in the current environment which WILL NOT change. It will only get more and more difficult. Services will survive so look out for a massive increase in hair,beauty,massage,nail etc businesses in Shopping Centres.

Rubbish
We all go into the old style retail shop, get the right information or try on the right size then go home and order it on the internet because it is CHEAPER. We love the service and the correct advice but always buy on the net.

Seems to me and this does not apply to your posts, that there are that many quasi experts out there who seem to indicate they know a helluva lot about things they don't.
The whole experience is being devalued by the proliferation of imitators who jump on a bandwagon inspired by fear.
The press are doing a sterling job of rattling the can and driving the consumer to online with a subliminal hint that consumers are being ripped off.
Yes, there are certainly better prices to be had and worth buying. Do we question them in a per centage of savings or by monetary value.
It's amazing to watch certain big bricks and mortar resellers cannabalising themselves with this rush to be a player in the game.
How's about a sign on a lot of businesses that says:
Don't waste your time coming in here - we are online and the less people in our store the fewer idiotic conditions we have to apply based on the conditions of award and retail conditions we have to try figure out.
And by the way if you buy from us online after hours according to these awards you might have to pay price and a half on Saturdays, Double prices on Sundays and on public holidays you won't have enough money.