Following on from our last blog I can assure you that Mrs Shalfoon’s relentless review and research of online retail continues unabashed.
This week’s little story is no different, you see we had some Freedom vouchers to use and dutifully Amanda let her fingers do the walking all the way over to www.freedomfurniture.co.nz where she found a couple of items that she wanted. She got to the checkout cart, ok so it’s a $65 delivery fee for these items, mmm that’s a bit steep but ok, she then finds out they don’t accept their own store vouchers online…so she would have to go in store.
Nooooooooo – she wanted me to come with her. I had an awful flashback to my time in London and losing weekends in Ikea, getting lost in one mock bedroom after another, Swedish meatballs for lunch and spending the rest of the weekend assembling Billy Bookshelves with tiny allen keys.
I have to admit I wasn’t very talkative in the car, thinking of my weekend vanishing in front of my eyes. Luckily, I needn’t have worried, Freedom is like an Ikea only smaller, a mere 2 hours later we had ordered, and even better news there was minimal assembly required.
But…and I should have known there would be a but, these items are not held in the store, stock standard small furniture items that they will sell many of this season. We will have to come back on Wednesday to pick them up, or they could deliver for $95, which was more than if we had ordered online like we wanted.
So we left the store a little deflated with our shopping experience, feeling that we were being punished. Frustrated after a run of great online shopping experiences.
Let’s take a look at the sales system Freedom has designed for their customers:
- Limited use of the store vouchers
- You can’t always walk out with the goods you purchased
- Extortionate delivery fees
- Two weeks allowance for item collection but then they will charge a storage fee
So why have a system like that?
It comes down to commercials, you see having stock distributed across all of the stores is really inefficient, as you have to forecast each store’s stock holding and move stock around stores as it starts to sell through.
I’m guessing that the decision to centralise stock and have a hub and spoke model would have saved millions of dollars in working capital. Freedom would have:
- lower stock holdings
- centralised stock holdings would give fewer stock outs
- less retail space dedicated to storage
- saving on continuing to ship stock between stores to balance out demand
But they have forgotten about the customer experience. Why do they think it is acceptable for the customer to come back in to pick up the stock? Delivery was offered for $95 on a $450 order when if we were able to buy online delivery was $65.
They need to manage the middle ground. They need to balance, the five c’s, the customer, commercials, competition, capability and capacity of the business.
So how could Freedom still enjoy the efficiencies but drastically improve the customer experience?
- If you are going to have gift cards, make sure you can use them across all channels
- Have a reasonable delivery charge, at least standardised on what is offered for online deliveries
- Build a Man Creche in one corner for all of the poor husbands that have been dragged out furniture shopping.