Are You Still Competing On Price?

Philipsburg Mall

In Philipsburg, NJ, the town across the river from where I live, a familiar ritual is taking place as we speak.

A shopping mall is closing.

Built in 1989, the Philipsburg Mall once featured one hundred stores and a four thousand-space parking lot. Today, this enclosed, 577,000-square-foot concrete structure is almost empty, and ready for the wrecking ball.

It’s part of what the experts have coined the “retail apocalypse.” Studies show roughly one in four malls across the USA are expected to close by 2022. This week, Macy’s announced the closure of twenty-eight locations. Pier 1 Imports said recently it would be closing nearly half of its stores.

Overall, 2019 was a terrible year for US retailers. Coresight Research announced 9,302 store closings, and that’s a 59% jump from 2018. In fact, it’s the highest number since they began tracking data in 2012.

AMAZONING

To explain this phenomenon, the same experts point to a trend they call the Amazoning of America. It’s the idea that malls and individual retailers are being pushed out of business by online giants like Amazon Prime and Alibaba.

Others are pointing to a changing economy where the middle class that used to shop at stores like Sears, Bon Ton, and Macy’s is struggling and is looking for cheaper alternatives.

The people who have trouble making ends meet now shop at the Dollar Store. After opening 900 stores in 2018, Dollar General opened 975 stores in 2019, making it the top retail company in terms of expansion. Discount chains like Dollar Tree, Family Dollar, Aldi and Five Below were in the top five for opening stores in 2019.

Yes folks, the U.S. economy is doing better than ever before!

To counter lower revenues and high rents, regular retailers purposely understaff their stores, and stock less or older merchandise, leading to a poor shopping experience. Good luck trying to get help in a department store these days.

With this in mind, it’s easy and convenient to point fingers at the economy and Amazon for the retail apocalypse. We don’t control Amazon, and we have no influence over something as abstract as “the economy.” If you can’t control it, you cannot change it.

Or can you?

BLAME BAZOS

Someone in my neighborhood was complaining about all the distribution centers being built in my region, the Lehigh Valley in Pennsylvania. “They take up farmland, they lead to an increase in truck traffic damaging our roads, and they’re just plain ugly,” the man said. “I blame Jeff Bezos!”

But what if Bezos wouldn’t have as many customers? Would he still be renovating his $23 million Washington mansion with 11 bedrooms and 25 bathrooms? What would happen if all of us would start shopping locally again, instead of online? Would developers still be building all those distribution centers?

The way I see it, we as consumers have tremendous influence on our economy. The way we spend money is our superpower to bring about positive and negative change.

It is our behavior that is killing shopping malls, bankrupting family businesses, and is giving the Five Below’s of the world billion dollar profits while their cheap Chinese trinkets are polluting the planet with plastic.

We choose the behavior, and we are responsible for the consequences.

As long as people don’t get that and blame outside factors for unwanted changes, we won’t be able to solve the climate crisis, the increase in racism, gun violence, and a whole string of other worrisome developments in our society.

To bring it back to my line of work… many of my voice over colleagues are complaining about rates getting lower, and clients getting cheaper. They blame the free market for their woes.

“It’s what the marketplace dictates,” they say. “A job that used to pay $2500, now pays $250. I can’t change that. A bird in the hand is worth two in the bush.”

VALUE PROPOSITION

I strongly disagree. Getting paid $250 for a $2500 job is the result of your inability to make an appealing value proposition to your client, and your ineptitude to negotiate a decent deal. It reeks of desperation and a lack of professionalism.

Just as the success of Amazon (and all its consequences) is the result of millions of individual purchase decisions, the lowering of our rates is the result of thousands of freelancers deciding to settle for less. No one is forcing them, and yet it sends a clear signal to our clients:

“This is what I believe this job is worth. Why pay a penny more?”

Look, I get that there’s a market for the Dollar Store, but why not leave that market to the freakin’ freelancers you find on Fiverr? They obviously can’t compete on value, so they can only compete on price. Let them dabble as they babble pretending to be a pro.

In this new year I challenge you to decide who your clients are going to be. The cheapskates who are the most demanding and demeaning, or the ones who value and respect you professionally and financially? This means drawing a line in the sand by being clear about what you no longer wish to accept for yourself and your community of colleagues. 

It may also mean raising your standards as well as your rates, because clients with bigger budgets expect you to give them their money’s worth. This is where the small shop owner beats the strip mall and the online retailer.

A DIFFERENT TOWN

Across the bridge from Philipsburg, lies the town of Easton, PA. It’s where I live. Easton is a town that warmly welcomes entrepreneurs. We don’t have a retail apocalypse. We have a retail resurgence!

Every month we celebrate the opening of new stores, businesses, and restaurants. People who are sick and tired of skyrocketing New York rents are coming to Easton. For what they’re paying for a tiny NYC apartment, they can buy a historic home or a penthouse overlooking the Delaware river.

The Easton Business Association is a free organization where all members help each other succeed. Together with the Easton Main Street Initiative, shop keepers, restaurant owners, and service providers come up with events that bring thousands of people to the downtown area. Every fourth Friday there’s Easton Out Loud with music, food, drinks, games, and activities for the whole family. 

You won’t find big box stores in downtown Easton. Instead, you’ll find flower shops, bakeries, gift shops, antique stores, vintage clothes shops, art galleries, independent book stores, cafés, pubs, restaurants, and breweries. And did I mention a fabulous Farmers’ Market?

Festivals such as Bacon Fest, Heritage Day, the Zucchini 500 races, and the Peace Candle Lighting bring huge crowds to Easton. All these events are sponsored by local companies and are run by an army of enthusiastic volunteers of all ages. 

In my town you will find unique things made by local artists and artisans you won’t be able to buy on Amazon or even Etsy. When I needed a set of walking poles, Adam (the owner of the Easton Outdoor Company), took over an hour to make sure I picked the right pair, and he taught me how to use them. That’s not an experience you can get online or even at Dick’s Sporting Goods.

COMMUNITY & CONNECTION

What Easton offers more than anything, is a sense of community and belonging that has disappeared from so many towns and cities. It comes from store owners who care about their business and their customers. From people who take pride in what they produce. From people who don’t see new stores as their competition, but as an opportunity to work together to attract more business. After all, visitors like having more choice.

Now, remember that all these stores exist and flourish in the age of Amazon. They don’t compete on price. They compete on giving the customer high-quality and often unique products, pies they can taste, flowers they can smell, and clothes they can try on. These shops offer stellar customer service, and an experience that makes you feel you’re among friends. These ingredients are the warm and fuzzies you’ll never get from a website, no matter how sophisticated or cheap it may be. 

So, in 2020 I want you to stop whining about sliding rates, and focus on how you are going to give your customers an experience they will always remember and are happy to pay for. Let me give you one hint:

You’ll never be able to distinguish yourself as long as you’re part of someone else’s store charging someone else’s prices.

Their roof. Their rules.

The shop owners at the dying Philipsburg Mall noticed that the Real Estate Investment Trust that owned the property treated them as commodities. They didn’t innovate and invest to bring back customers. Right now, the roof is leaking, repairs aren’t being made, and the parking lot is filled with potholes.

Some people believe the owners are driving the mall into functional obsolescence. The land under the mall, however, has value. 

It’s perfect for yet another ugly distribution center. 

Paul Strikwerda ©nethervoice

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About the author

Paul Strikwerda

is a Dutch-English voice-over pro, coach, and writer. His blog is one of the most widely read and influential blogs in the industry. Paul is also the author of "Making Money In Your PJs, Freelancing for voice-overs and other solopreneurs."

by Paul Strikwerdain Articles, Internet, Money Matters, Uncategorized

6 Responses to Are You Still Competing On Price?

  1. Shane Wilson

    This probably isn’t the takeaway from the article that you intended, but why does Bezos have more than twice as many bathrooms as bedrooms? Overabundance of fiber in his diet? Excessive daily water intake? That’s just crazy.

    [Reply]

    Paul Strikwerda Reply:

    The only thing I can says is that Bezos likes to stir the pot 😉

    [Reply]

  2. Monk

    Paul, I’ve been preaching this for years, it’s the WalMart mentality. People want things cheaper, and will shop online for the lowest price. Manufacturers in an effort to compete, move to wherever labor is cheapest. (clothes, computers, cars trucks…) to keep their prices down.

    Which leads to layoffs. And the need for people to scrimp to make ends meet. It’s the snake eating its own tail.

    We tried to get a product made in the USA, and it would have cost us $160 per unit. We have it made in China for $12.70 a unit. And people still balk at its $49.95 selling price. (www.toccatablocks.com)

    Would they pay over $300 for it? I doubt it.

    It is a race to the bottom for some things. World markets don’t always “raise all boats” sometimes it just lowers the water table.

    [Reply]

    Paul Strikwerda Reply:

    Thank goodness voice-overs aren’t manufactured in China (unless they’re Chinese). What I do object to is rich Western companies outsourcing their VO needs to low-income countries. Businesses in these countries will try to book people from Europe and the US for insultingly low rates. As long as they can find idiots willing to work for next to nothing, this problem will persist. I am not going to enable the erosion of rates just because clients plead poverty. You’ll never get to the top in a race to the bottom.

    [Reply]

  3. Carolyn Rubin

    Paul so well written and so on point. It brought to mind the famous quote from Ghandi “Be the change you want to see you want to see in the world”. And personally I love the “warm and fuzzies” of great customer service and would love to see the cheap Chinese trinkets polluting our world banned forever!

    [Reply]

    Paul Strikwerda Reply:

    We’re on the same page!

    [Reply]

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