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Jim Green's blog

Price or Value?

September 3, 2010

In Jim Sherbert's blog of August 23, a reader rather tersely (and rudely) asserted that what Sherbert was advocating was "ivory tower BS" and he should "put your money where your mouth is" in response to his opinions. The reader, in my view has an extremely shortsighted and microcosmic view of our industry. To be sure, many retailers at the promotional end of the spectrum are indeed price driven. But to suggest that every retailer and manufacturer is as well is ludicrous. Someone ought to tell FBI's Henredon, Drexel, Hickory Chair, and Pearson, that they may as well close up shop because they just can't compete. Although, someone is selling their merchandise. So, should AICO and Century just give it up. Some retailers like Top 100 Robb and Stucky rarely even lists a price. Gabberts seems to be still in the hunt. Haverty's, after more than 100 years is rarely the price leader. Likewise, Badcock.
My point is that at the promotional end, price is a major competitive issue. I would argue that value is still the more important factor, however. If store A runs a sofa for $299 but charges $75 for delivery and store B runs a similar one for $349 but delivers it for free, which is a better value? The point is that value is simply what you get for what you give. It doesn't matter if it involves a $299 sofa or a $4,299 sofa. Furthermore, value not only relates to price/item but also to, price/service, price/convenience, price/merchandise availability, price/selection, price...well you get the point.
Retailers at every price level follow individual strategies that best suit their personal proclivities, specific markets, vendor structures, locations, and a host of other factors. To say that price is the only factor that matters in our industry is, well just plain wrong.