We must all acknowledge that the cost of doing business in this great land is high, but so is the quality of life we gain from this. Margins must rise if we are to survive but how will consumers react, what will they get in return, I believe the answer is in experiential value add service.
To do the same each day and expect a different result is insanity, we have all heard that many times, so why are we not changing our consumer offer and training our customers to understand if they want a great experience, quality goods and exceptional back up, they will pay a little more. If you don’t think it can be done just walk into an apple store, any one in any centre at any time and compare it to any other business in that area. Apple have the cash register ticking faster with great margins…… Also supporting this is data that indicates 20% of JB HiFi’s sales are drawn from apple product, but at far lower margins. Now of course if you are selling low value product extravagant fit-out and glossy offers are limited, but please get the basics sales process right.
Research shows that Australia’s high standard of living comes with the following price. Our minimum wage is in the top few in the world and sits at least 25% higher than our main trading partners and in some cases it is greater than 60%. Business lease rates are also among the highest in the world. The result of this is lower returns per square meter against international standards, a further indication we cannot compete head to head, and the difference is far greater than the GST as some comment.