Missing out the middlemen

Everyone likes saving money. We like saving 5 grand from cheapcarsfromeuroland.com, we love buying cheap booze in Calais and we keep ordering CD's from WOW in Hong Kong. Nobody can escape this greed it's natural and it's here to stay. Everyone values "value". We like to get what we pay for, and when we don't we will happily bend the rules. A good example of this is music and software. How much is on your computer right now, that you didn’t you pay for. I am not trying to get moralistic I'm just saying that you, like me think that much of these items are too expensive.. CD’s should be £10, and when they're not, I'm going to think twice before I buy. So in the past I would be on my brother's twin deck copying an album on to a D90, these days' people download a days' worth of mp3 on their hard drive. So what if I buy a few CD's now again, that's fine, I still have 10g on iTunes I didn't pay for.

The problem with this bending is when it happens closer to home. People are happy when all they get is the benefit, but they soon start to moralise when the bending starts to break them. So if your local car dealer has to close down because of internet imports, for them it's an outrage. The fact that they bought their holiday over the internet, well how could that affect their next door travel agent. The fact was the local travel agent didn't offer them value, and they didn't offer their customers any either.

Since the days of Sir Freddie Laker in the early eighties we now look at a very different airline industry. With the likes of Ryan Air and easyJet, the industry has literally been torn apart by offering value to the consumer. Now I think everyone agrees that what they offer is far from perfect. But we are happy when it's cheap. In a year that still sees many airlines reeling in the post 9-11 era, Ryan Air have posted post tax profits of £234 million. If they can make this much money flying planes with cheap fares where does all the money go that BA get flying their 37m passengers around. Well it would be wrong to say they waste it, and I am sure they pay higher landing costs where Ryan actually get paid to land, but it goes somewhere. All people have to do is decide whether to pay for fancy advertising and plumped up cushions or a basic but perfectly acceptable flight to somewhere hot. Ryan has saved money by doing things differently. They pick obscure airports like Frankfurt Hahn which ok is out of the way, but if you live closer to it than Frankfurt-Main then that's a bonus. Sure there are complaints about service, comfort even safety but make no mistake they have changed the way we view air travel and we are not going back.

Getting on to Barrabes..

Barrabes have set out an ambitious project called "open minded", they have stated that through this project they hope to become a direct link between high quality brands and the market, avoiding all traditional intermediaries and achieving an exceptional price. Basically this means missing out the middle men. In stating this they have upset a lot of people, most of all those that didn’t think of it first. When the complaints come in they very rarely talk about money, they talk about jobs, they talk about brand values, and they talk about the need to keep the status quo. Yes, the same people who are quite happily closing factories and shifting production of to Asia. And the speciality retailer who was quite happy to sell a pair of BD axes to the UK. Suddenly the industry has become all moralistic and defensive.

The personal bit..

This really pisses me off. If they just come out straight and say I was not clever enough to think of this myself or I didn’t think the internet could affect my business so much, and this euro.com is really making my life suck. If they just said that, I could understand. I might even say look get your own back; with the weakness of the dollar at the moment it is way cheaper to buy stuff in the US and ship it back to euroland. But they don’t, they just moan. LOOK here is the deal; nobody likes paying more than they have to, if they can save a buck or two they will.

When the major brands talk about it things become really tricky for them. Firstly they can just say no. They don’t have to supply them, the problem comes when Barrabes becomes a dominant European retailer what then. Do you supply them and lose the support of your customer base, or do you miss out on this supply chain? Barrabes is making a brave move, and I hope that they can truly make an impact on the outdoor market. Having worked for a small, relatively unknown European brand I was always stunned by the view that many retailers took towards new products. There is truth in every industry that nobody gets sacked buying big blue. Well, I guess no one got sacked buying Mammut or Berghaus. If Barrabes can really champion small upcoming brands the industry will be a much healthier place.

For these retailers who are going to be faced with a sea change in consumer buying patterns, it may be time also to take a fresh look at what their shop is selling and how they sell it. They are right when they say that it’s unfair that people come in just try on stuff and then go and buy it over the internet. But that’s why they have the margins so they can invest in to, attract and more importantly keep their customers. Customers still like shopping, I can’t think of anything better than going into a record store and buying a few CDs but I wouldn’t leave with much change from £50. And I, like many can’t do that very often. I love going into climbing stores but when TK max have Patagonia jackets at 20% "of the" retail cost then what I’m I going to do? I would have to be brain dead not to buy it. I don’t care a jot, Yvon has made his slice out of me over the years. So hopefully this year the consumer will get their slice of value.

More information about the Open Minded project can be found on the Barrabes site