How to Compete With the Internet Giants

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Does Internet competition keep you awake at night? At the 2014 NAMM Show, Music Trades magazine columnist Bob Popyk moderated this panel discussion with music retail experts Bryan McCann of Instrumental Music, Ryan West of West Music and CJ Averwater of Amro Music. They presented proven ideas to get customers into your store, keep existing customers, hold your profits and stay in business when online merchants get in the way of a sale. Highlights from the video: On customers price-shopping your store after they find a product cheaper online: “It’s our opportunity and our responsibility as retailers to help customers understand where we add value and how we add value,” West said. “If they’re asking about [price], I think we can talk about the immediate availability. We have an opportunity to serve them right then and there. They don’t have to wait for something to arrive. But we also want to understand if price really is the issue and if price is the defining factor. And it may start as a price conversation, but it can morph to a service conversation.” On training salespeople to handle tough online price-shoppers: “We do a lot of training with them as far as how to respond,” Averwater said. “We do a lot of role playing-type things, where we specifically come in ourselves and try to play hardball and try to teach them the elements as they go to turn it around.” On creating relationships with potential online shoppers: “When someone visits our store, I try to get them to buy something,” McCann said. “Because then you have a connection with that customer. Whether it’s a set of strings, whether it’s anything, now there’s a channel. There’s a relationship between Instrumental Music and my customer.” On handling the online sales tax issue: “Most people in the store say, ‘They don’t charge tax online,’” McCann explained. “I say, ‘We don’t charge tax either. We just collect tax. Because you have a tax liability in California. If you take delivery of goods, the Internet retailer’s not collecting your tax liability, but you still have it. So if you’re ever audited or something like that, you’re going to have to pay for the sales tax on all those purchases made. And also, those purchases go to arguably worthy causes in your community.’ When I say that to people, they [say], ‘Really?’ And then sometimes, they don’t worry about it. Or sometimes, I’ll meet that number with some high-profit accessories, so we can have the relationship that’s not that costly to do.” On customers who price-check products on their smartphones: I think you have to engage with them,” West said. “That’s potentially the kiss of death. You see them, they’re with their cell phones, and they’re price-shopping the store. That’s the opportunity to say, ‘Great, what’s the price you’ve got there?’” On turning around negative online comments: “I think the first thing you’ve got to do is reach out to them and see what you can do to fix the problem,” Averwater said. “We’ve had a lot of customers who have had an initial bad experience, and we reached out to them and said, ‘Listen, we’re sorry you had a bad experience. How can we fix it?’ And after working with it, they actually went back and turned it completely around. So I think the first thing you’ve got to do is be very proactive and very quick in responding to it.”