Changes in the photographic Industry in Australia
Over the last week Australian retailer JB Hi-Fi decided to launch an industry coup and start offering Grey market (parallel imports) on Cameras from Canon, Nikon, Sony and many other brands.
The ramifications of this move have shaken the very foundations of the Australian retail electronics market. We all know that in Australia prices on average are higher then those from other parts of the world but often we dont think why.
Whilst I accept that Australian retailers in general want and receive more from suppliers than the US retailers for example and that has to be added to the price, we are also taxed a little more, then we have the problem that because the population of the country whilst at 20 million people or slightly more, we are competing against countries like the US who have 200 million or more and with relative economies of scale it WILL be more expensive in markets where there are not as many people.
I accept and fully understand the desire to get a product at a cheaper price, though with Australia's parity pricing against the US Dollar overseas prices have appeared much cheaper and there has been a wholesale move to get products cheaper. I get that.
The situation with JB is so interesting. They now will be offering cameras that ARE sourced through established trading terms legitimately from suppliers in Australia INSIDE their retail stores at a given price which will be in most cases be around $200 MORE than the JB Online Direct price selling cameras NOT brought into Australia by the manufacturers but by JB's buyers.
They claim in a published article yesterday that they were "forced" to do this because of the rise of small operators who do grey market and not "tell" their consumers there are deficiencies in comparison, where most consumers see a cheaper price and fail to imagine or even ask why!
What's the difference?
The imported product may not comply with local standards. Okay I hear you say, but I have saved $200! Great!
What happens if the camera fails in the warranty period of 12 months? Ostensibly, Canon / Nikon Australia will not touch or repair the product at all under warranty meaning that you have to take a grey market camera back to JB or the place of purchase and then JB or other supplier have to send the camera back to the point of origin for repair which could mean, china, or any number of countries.
Secondly, the instruction manuals may not be in English, big deal I could get an english one from Nikon right? Wrong, Nikon and Canon will not support with manuals, you will have to purchase them at around $50 which have to be ordered.
It may seem a petty thing to raise, but when we ALL want to save dollars on avoiding GST and other taxes that this country requires, we ALL lose. The roads we drive on are deteriorating, the hospital beds that are diminishing, the policing that is becoming less adequate in dealing with crimes that 60 minutes reported last week, all comes from taxes.
This is no generalisation or beat up when I say here, that the future of consumer electronics in this country and especially Bricks and Mortar shops in this country are on notice. That will mean hundreds if not thousands of jobs that will be made redundant as more and more people seek an online experience and the relevance of shops fall more and more into question.
We are already seeing it now when people go into Australian retailers after learning about their product of choice online and then picking the brains of salespeople, then after they have what they want, saying to the retailer I will only buy it from you IF you can match a price that is ridiculous from an online grey market supplier. Effectively we have used a resource of knowledge that a retail owner is paying for, and ignored the benefit that having that knowledge brings to us overall.
Once the customer walks out ridiculing the retailers higher prices feeling they are not going to be "ripped off" by paying THOSE prices, when they buy the product and have issues or problems after the point of purchase from an online supplier, where do they go for attention or help? the retailer they originally snubbed and ridiculed!
A retail shop said recently that I was in to such a customer, "where did you buy the camera?", they said "________" who was an online supplier, to which the retailer said "why dont you take it back to them?" only to be told that they are overseas, with a growingly frustrated customer almost yelling "cant you just help me?"
The answer to that question from suppliers is a big NO. They will not touch, repair or update firmware or software for models of cameras that were not sourced from this country.
How would they know? - They keep serial numbers of EVERY product / model brought into the country.
Customer frustrations will start increasing and the whole market as we know it in this country has entered into a new and interesting phase. Im not sure if it will be an entirely brave new world but new it certainly is!
My final prediction here is that retailers will not entirely diminish, we will see a similarity to budget airlines in this country where the prices of airfares or in this case cameras becoming cheaper, with accessories and all other requirements becoming "add-ons", and most importantly the advice we seek to extract from retailers about which product is best and why, will become a premium service you pay for.
I predict further that retail and wholesale sales people will become brand specialists that are highly skilled and perhaps even sought after, I think the growth of photographic camera courses will increase, I think that retailers as we know them now will largely be swallowed up by the retailers who can afford to lose money on cameras and make money on other products to offset the losses on electronics.It is not new in its presentation, it is a newer face on the "kill or be killed", the strongest will overcome the weakest scenario that has been with us in some form or other for centuries.
This is the bell tolling time for small and intermediate retail operators to diversify and adapt or be come irrelevant and disappear.
I hope that the consumers end up with something the majority are happy with, though I remain quietly pessimistic that we will one day soon complain more that what we ended up with was less than what we had, and ultimately preferred.
"The bitterness of poor quality and problems will remain long after the sweet taste of a cheaper price has disappeared."
We live and work in interesting times indeed.
The ramifications of this move have shaken the very foundations of the Australian retail electronics market. We all know that in Australia prices on average are higher then those from other parts of the world but often we dont think why.
Whilst I accept that Australian retailers in general want and receive more from suppliers than the US retailers for example and that has to be added to the price, we are also taxed a little more, then we have the problem that because the population of the country whilst at 20 million people or slightly more, we are competing against countries like the US who have 200 million or more and with relative economies of scale it WILL be more expensive in markets where there are not as many people.
I accept and fully understand the desire to get a product at a cheaper price, though with Australia's parity pricing against the US Dollar overseas prices have appeared much cheaper and there has been a wholesale move to get products cheaper. I get that.
The situation with JB is so interesting. They now will be offering cameras that ARE sourced through established trading terms legitimately from suppliers in Australia INSIDE their retail stores at a given price which will be in most cases be around $200 MORE than the JB Online Direct price selling cameras NOT brought into Australia by the manufacturers but by JB's buyers.
They claim in a published article yesterday that they were "forced" to do this because of the rise of small operators who do grey market and not "tell" their consumers there are deficiencies in comparison, where most consumers see a cheaper price and fail to imagine or even ask why!
What's the difference?
The imported product may not comply with local standards. Okay I hear you say, but I have saved $200! Great!
What happens if the camera fails in the warranty period of 12 months? Ostensibly, Canon / Nikon Australia will not touch or repair the product at all under warranty meaning that you have to take a grey market camera back to JB or the place of purchase and then JB or other supplier have to send the camera back to the point of origin for repair which could mean, china, or any number of countries.
Secondly, the instruction manuals may not be in English, big deal I could get an english one from Nikon right? Wrong, Nikon and Canon will not support with manuals, you will have to purchase them at around $50 which have to be ordered.
It may seem a petty thing to raise, but when we ALL want to save dollars on avoiding GST and other taxes that this country requires, we ALL lose. The roads we drive on are deteriorating, the hospital beds that are diminishing, the policing that is becoming less adequate in dealing with crimes that 60 minutes reported last week, all comes from taxes.
This is no generalisation or beat up when I say here, that the future of consumer electronics in this country and especially Bricks and Mortar shops in this country are on notice. That will mean hundreds if not thousands of jobs that will be made redundant as more and more people seek an online experience and the relevance of shops fall more and more into question.
We are already seeing it now when people go into Australian retailers after learning about their product of choice online and then picking the brains of salespeople, then after they have what they want, saying to the retailer I will only buy it from you IF you can match a price that is ridiculous from an online grey market supplier. Effectively we have used a resource of knowledge that a retail owner is paying for, and ignored the benefit that having that knowledge brings to us overall.
Once the customer walks out ridiculing the retailers higher prices feeling they are not going to be "ripped off" by paying THOSE prices, when they buy the product and have issues or problems after the point of purchase from an online supplier, where do they go for attention or help? the retailer they originally snubbed and ridiculed!
A retail shop said recently that I was in to such a customer, "where did you buy the camera?", they said "________" who was an online supplier, to which the retailer said "why dont you take it back to them?" only to be told that they are overseas, with a growingly frustrated customer almost yelling "cant you just help me?"
The answer to that question from suppliers is a big NO. They will not touch, repair or update firmware or software for models of cameras that were not sourced from this country.
How would they know? - They keep serial numbers of EVERY product / model brought into the country.
Customer frustrations will start increasing and the whole market as we know it in this country has entered into a new and interesting phase. Im not sure if it will be an entirely brave new world but new it certainly is!
My final prediction here is that retailers will not entirely diminish, we will see a similarity to budget airlines in this country where the prices of airfares or in this case cameras becoming cheaper, with accessories and all other requirements becoming "add-ons", and most importantly the advice we seek to extract from retailers about which product is best and why, will become a premium service you pay for.
I predict further that retail and wholesale sales people will become brand specialists that are highly skilled and perhaps even sought after, I think the growth of photographic camera courses will increase, I think that retailers as we know them now will largely be swallowed up by the retailers who can afford to lose money on cameras and make money on other products to offset the losses on electronics.It is not new in its presentation, it is a newer face on the "kill or be killed", the strongest will overcome the weakest scenario that has been with us in some form or other for centuries.
This is the bell tolling time for small and intermediate retail operators to diversify and adapt or be come irrelevant and disappear.
I hope that the consumers end up with something the majority are happy with, though I remain quietly pessimistic that we will one day soon complain more that what we ended up with was less than what we had, and ultimately preferred.
"The bitterness of poor quality and problems will remain long after the sweet taste of a cheaper price has disappeared."
We live and work in interesting times indeed.
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