Service

Perhaps I’m showing my age, but I remember a time when there was such a thing as a corner store.

Usually businesses run by mum, dad and perhaps the kids after school. They had the necessities of life, not rows and rows of the same thing, but common sense products that did the job for a reasonable price.

Shane Drew has been involved in the sign industry since 1992. Before that he had a very successful career in sales, winning several Sales Awards before deciding on a career change in his early 30’s. Shane has been writing freelance articles since 2002 and is a sign industry mentor for sign shops both in Australia and Europe, is a regular contributor to Europe’s biggest sign industry forum, and is well known in local circles for his passion about the Australian Sign Industry. Shane is Managing Director of Drews Sign It Pty Ltd, a family business who are supporters of several major charities and not-for-profit organisations. A recent highlight is his appointment as a Green Guardian for his support of Currumbin Wildlife Sanctuary, on Queensland’s Southern Gold Coast

Of course, the beauty of the corner store was that you got to know them and they got to know you. As a result a trust built up over time. Each business had its own personality.

Sadly, the corner store is a thing of the past. Multinationals moved in and scuttled the livelihood of the mum and dad businesses with the argument that we‘d benefit as a community. Instead, we have been left with a duopoly of a bland uninspiring catalogue mentality with a take-it-or-leave-it philosophy. Stores like Coles and Woolworths took no prisoners in their lust for a monopolised environment.

Since Coles have set up in my own local community we have lost our local continental deli run by a family business and the family owned butcher closed down after finding Coles aggressive pricing too hard to compete with.

It was not too long before we saw prices rise once they had established their dominance in the meat sector. Is the meat better? Has the community benefited?

Its probably only a matter of time before the family run fruit and veg shop and the family owned bakery decide to call it a day. Coles and Woolworths business model reflects the need to totally control the retail environment, monopolising our spending habits.

Now the duopoly dominance has been established, the major players are  actively ‘encouraging us’ to use the new DIY express lanes, leaving us to scan our own goods, pack our own bags, and process our own payment, making the shopping process even less interactive for the consumer, and more profitable for them.

Do we benefit from cheaper prices, even if we take the ‘no frills’ DIY express lane?

What about the family run independent Petrol Station and  workshops?

In this modern ‘enlightened world’ we don’t even have driveway service anymore. The fuel is no cheaper, but now we are expected to fill our own tank, check our own oil, pump our own tyres. Do we benefit in the form of cheaper services?

Multinational duopolies, predominately BP & Shell, are fighting to monopolise our fuel purchases. When they joined forces with the retail duopoly, it was the final nail in the coffin for the smaller fuel retailers.

What about the hardware store? Remember them?

The small hardware store may not have had 30 different mowers on offer, but what they did sell was something that they knew intimately. Their livelihood depended on understanding the community needs, offering not only good value but also service, and having the knowledge learned by years in the hardware trade.

Now we have these big monstrosities, a duopoly market dominated by Bunnings and Mitre 10 Mega, that have millions of items and staff who are struggling to understand how half of the products work, let alone know where they are in the store.

There is so much choice, it assaults our eyes and boggles the mind. Once again, in my local community we’ve seen several small family businesses that have been in the hardware industry for decades close down and go broke once the duopoly became established.

As a consumer, are we any better off?

Kati Oberle, in her online article Local Businesses vs. Big Businesses (http://ethicalfootprint.wordpress.com/2010/04/21/local-businesses-vs-big-businesses/) looks at the pros and cons of monopolisation in America.

“The most popular examples are Wal-Mart and Target. With the loss of local stores, the town also loses the feelings of community and interaction with your neighbors. In big stores such as Walmart and supermarkets people behave very differently than they do in family and local businesses that have the “environment that slows the pace of life and encourages people to loiter and converse.” Whereas in big stores, there is less room for this type of interaction. People are more likely to just do their shopping and leave than stay for awhile and chat with their neighbors.

Studies have shown that an environment with small local businesses lead to a livelier and more active community than one in a city monopolized by big businesses.

Another disadvantage of a big business monopolised town is how these businesses treat their workers, both the workers in the individual stores and the workers who produce their products.”

Now, our own sign industry is faced with a monopoly demon. It has been a matter of concern within our industry for some time, and several industry forums have openly expressed disgust with the practices of the multi-national, a group that have emerged as a major player in the last few years. 

This organisation is claiming their business model “ is one which has proven the test of time…”

Clearly, it appears to me that their business model is all about monopolising the sign and POP industry. They aggressively market their products at prices that make it virtually impossible for the majority of sign shops to compete. The attitude is clearly to squeeze them out of the game.

Their most recent campaign offers banners at bargain basement prices, however the very fine print states that you have to pick it up from their Sydney premises and doesn’t include artwork. Not a lot of people I come across read that bit.

I am coming up against them regularly now. They have inserts in a broad section of publications, using a ‘scatter gun’ approach to marketing. My argument to a prospective client who pulls out a flyer from them after I’ve submitted my quote is simple. ‘If you want to buy crap, then I’m not interested in doing business with you. Simple as that.’

I rarely lose a quote to them, but I have lost count of the amount of sign people who ring my wholesale business wanting better quality workmanship than they offer, but at the same price. It’s like wanting to buy a Holden Statesman for the price of a Commodore sedan.

My personal opinion is that companies like this are verging on becoming a predatory merchant. Companies that have business models intent on pricing others out of the market are engaging in a predatory manner.

A predatory business’s first aim is to come across as ’one of us’ by seeking and getting support from high profile organisations within the market they are pursuing.

According to wikipedia, the definition of predatory pricing is: ‘the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.

If competitors or potential competitors can’t sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly, and hypothetically could then raise prices above what the market would otherwise bear.’

Clearly, if we as an industry are not alert to this type of behaviour, the small to medium sign shops will go the same way as the corner store, the butcher, the deli and the local hardware store.

It is a vicious circle. But the more my business suffers from aggressive and predatory marketing, the more my suppliers will suffer.

Just like any monopoly, it means jobs, skills and the futures of a lot of people are in the balance, which ironically goes against the interest of the organisations two main industry supporters.

Shane Drew

www.dsi.net.au
[email protected]