By Richard Renouf, Independent Flooring Consultant
The most important price for a customer to consider is the total price they will pay for the finished job, and this is the best way to compare between retailers. Regrettably, the customer is unlikely to be able to work this out themselves and so they tend to focus on the displayed price for the flooring when comparing your shop with someone else’s. This has created scope for lots of creative ideas to prevent price comparisons, or to make ones prices seem cheaper than the competition, and this can be very frustrating.
Most of the bigger flooring retailers, including many of the ‘sheds’ will rename their products. This disguises the brand name and so prevents a customer shopping around for the best price simply by ringing round or searching online.
A second common practice is to keep the displayed price of the flooring low and inflate the prices of ancillaries such as underlay, gripper and adhesives to ensure there will be adequate margin in the overall sale.
‘Free fitting’ is a commonly used phrase but it is only legal to make this claim if you have been selling your products with fitting charges for at least 28 days in the previous six months. If the fitting price is simply included in the square metre price or ancillary prices, ‘Fitting included’ is a more accurate term to use. In reality, fitting is never free, so either the customer is paying for it or the retailer is hiding the price in the quote.
Discounts have to be carefully monitored in order to comply with the legislation. A discount can only be claimed if the product was at the higher price for at least 28 days in the previous six months. Once the discount has been shown for 28 days it becomes the new price and so it cannot be shown as a discount. To add further confusion, if a discount is being claimed, any intervening prices between the reference price and the discount must be shown. This could mean having to show a series of mark downs or it might mean having to show that the product had a bigger discount previously and so has, in effect, increased in price.
Some of the bigger retailers seem to offer perpetual discounts and this may be possible by rotating which goods are discounted at any one time. Accurate records need to be kept in case of a challenge and Trading Standards will check whether that actual product and colour/size was at the full price, discounts cannot be offered if only a limited range was sold at the previously higher price.
For the smaller retailer it can be much simpler if the ‘normal prices’ are on the price tickets and blanket discounts are offered for a limited time by way of notices rather than individual ticketing.
Joining a buying group can often mean you are able to buy exclusive products that cannot be obtained by other retailers in your area. This can be an effective way to avoid conflict with competitors and it has the added bonus of helpful advice and guidance from the group as well as marketing support.
Few retailers will allow customers to have a copy of the measure sheet or a detailed price breakdown, at least before the order is converted, to make it harder to price match and to avoid a competitor being able to estimate from their measurements rather than having to carry out their own home visit. As this means most enquiries will need a home visit but a proportion of these will not convert, some retailers charge for estimates, taking the cost off the order if the customer proceeds. The downside of this is that the customer has then paid for the service and would be entitled to ask for a copy of the estimate/measure they have paid for, but at least the retailer has been paid for the work they have done.
Back in the early nineties, the Office of Fair Trading threatened the flooring trade (and the furnishings trade in general) with stricter legislation because the rules were not being followed and consumers were being misled into making a purchase under false pretences – and some of these creative ideas were under scrutiny at that time. The OFT was replaced by the Competition and Markets Authority and the enforcement work of local Trading Standards Offices also changed. Sadly, ‘sharp’ pricing practices have not gone away and this is a problem for honest retailers, especially independents, who face unfair competition from companies who are pushing the boundaries and in some cases, engaging in unfair trading practices. Trading Standards no longer deal with individual customer complaints but are engaged in rooting out unfair practices and it is only a matter of time before test prosecutions will be carried out in our sector to challenge some of the misleading practices.
In the meantime, if you feel you are facing unfair competition because of sharp practice you could seek advice from Trading Standards, which would bring this to their attention, or raise the issue with your buying group who could consider collating examples of common problems so that an approach can be made on the basis of far more evidence. If you’re not already in a buying group, it’s a good reason to consider joining one.
Richard Renouf is an experienced customer service and flooring consultant and expert witness. He can be contacted via The Stocklists’ editor – lauren.mccarthy@kick-startpublishing.co.uk – and your questions may even find their way into future articles to help others dealing with similar situations. Please note that this article is not intended to be, or to be a substitute for, legal advice.