Quote:
Originally Posted by plib
Can we vote for favourites?
(Although that one is actually in the related article.)
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Be my guest.
On the quoted one, I would point out that politicians are generally understood to both lying a------s *and* illiterate as to real world economics so it is hardly impossible for the subjects of the comment to be both, too.
It's not an either/or proposition.
The same applies to the retail debate.
Price competition is *not* price matching, rather it is recognizing that *price* is a major, often dominant, element of the consumer's value equation and acting accordingly; adjusting your cost structure to meet consumers' aggregate values.
Note the distinction between the individual consumer's value assessment and the emergent competitiveness valuation that comes from the aggregate of all consumers applying their individual values. Because not all consumers apply the same weight factors to the elements of the value equation, this allows vendors/distributors/producers to be competitive without matching the low-price leader: they merely have to be better enough (for enough consumers) at other elements of the value equation.
Harping blindly and shrilly about Amazon (or Walmart or any other low cost retailer) is to willfully ignore the rest of the ways those retailers satisfy consumer needs. Amazon (to focus on the industry whipping-boy) isn't just a low price leader, they are also a customer service leader, they are a delivery speed/cost leader, they are a catalog size leader, they are an accessibility leader... Alll those things matter to consumers to one extent or another.
The core problem that B&M retailing faces isn't so much pricing as the fact that they can *not* be everywhere and online retailers can and are. For book retailers in the particular, they long ago committed to an essentially passive business model: "Stock it and they will come". The warehouse vendors refined that to "stock more and more will come" and in the process saddled themselves with massive overhead costs that they tried to mitigate with long-term leases, which effectively tied their hands when people stopped coming in droves.
And the reason they stopped coming was that the online vendors effectively go to the consumer instead of expecting the consumer to go to them. They are the ultimate door-to-door salesmen, really. B&M retailers need to find ways to offset that onliners ubiquity with advantages of their own instead of whining about their "unfair" advantages and running crying to seek bureaucratic protection from politicians.
Retailers that dream of government-forced price-fixing are deluding themselves.
They think that enlisting the state's power to force compliance they can save themselves from having to adapt when all they are doing is shifting their vulnerability to another area. The online vendor can always use the "excess" margin from the mandated price-fix to improving other aspects of the value equation: increasing their catalog by acquiring exclusive house-brand products, by pre-positioning inventory closer to consumers, by developing new approaches to appeal to consumers, etc...
The only thing that resorting to government "protection" achieves is to delay and *magnify* the inevitable reckoning. Instead of a slow steady attrition, the "protected" players will face instead a quick, catastrophic collapse when their shield is overwhelmed by their competitors' advantages.
Sooner or later, one way or another, the burgmeisters of Hamelin will pay the music bill. Deferring the debt merely increases the default penalty.