I find this failure to identify the real issue and discuss it in frank terms most distressing and a little bit irresponsible. Kinda like pointing out that “the emperor has no clothes.” All his servants are afraid to say so for fear of reprisal, so they let him run around naked. It also reminds me of a man standing on a curb giving advice to another man standing in the middle of a busy street. The guy in the street is complaining that he is very likely to get run over if somebody doesn’t do something. The guy on the curb suggests to the guy standing in the street, “Look at the car driver’s eyes. If he sees you, he probably won’t run over you and you’ll be safe”. Not wrong advice. BUT wouldn’t better advice be something like “get the #$&@ outta the middle of the street!”

The point… The Internet is not the problem about which retailers lament! The problem is what brands allow to happen on the Internet. Before the Internet it was the gray guys in the warehouse district behind the bowling alley or the flea circus down the street or the guys in the back of the magazines. The Internet is simply the latest and most efficient tool.

In many cases, the brand has written agreements with its customers. The agreements often provide rules governing MAP, MRP, transshipping, at which address the retailer is authorized to sell, selling on the Internet, etc… So, the brand’s customer violates the Internet rule and sells at cost on the Internet or transships to an e-bay guy who sells at cost or, well you get the picture. What does the brand do in the way of enforcing its policies? NOTHING. Therefore the promise made by the brand to every customer who signed the agreement, follows the policies and expects that policy violators will be disciplined is worthless. (The brand’s un-written policy, “wink & nod,” is the subject of another issue.) The retailer is SURPRISED when his consumer “buys it at cost on the Internet.” Beyond surprise, now frustration and anger set in. Tears. Laments. Complaints. Threats. “Why I oughtaa…”

It isn’t the Internet that caused surprise, frustration and anger. It’s the brand partner’s failure to consistently enforce policy and create a more predictable business condition. I contend, if we seek to address a problem we ought to identify the root cause and advise “get the #$&@ outta the middle of the street.” Looking at one driver’s eyes leaves the guy standing in the middle of the busy street quite vulnerable to all of the other cars intent on running him over…

SURPRISE…? My @$$! We ought to know better.

At your service,

Ray Windsor
Leadership Systems