GST on all imports

The argument that the Australian Government uses about imposing GST on all imports is obviously a put up job from the retailers.  Retailers stuck in a past century using outdated business models.

We are told that imposing GST on imports will level the playing field.  Local retailers have to pay GST so why not also charge GST on all products purchased from overseas too?  It sounds fair on the surface, that's if you don't scratch too far below that surface.

The fact that the act of collecting GST is going to outweigh the revenue it produces is a topic for another time.  It just shows how the retail lobby are able to use enough clout to cause the government to lose money on a bad tax.  In my view, a bad tax is one that doesn't efficiently raise revenue, or indeed requires compensation for it to be made fair across the board.  That's a topic for another time too.

Back to the initial argument about level playing fields.  Lets take a look at our playing field and see in just how many areas local retailers have it all over the importers.

The most obvious one is local presence.  They have prominence of their brand through advertising and physical presence in the community.

This physical presence allows shoppers to touch feel and try out goods.  This is pretty hard to do on line.  Unless you know and trust the product and the retailer very well, buying articles on line can be a bit of a leap of faith. Locally retailers have much more opportunity to build brand loyalty.

Customer service is something the locals have in spades over the on line experience.  I will get onto how retailers can use technology to enhance customer service in a moment.

Instant gratification is the big one for me.  To actually go out and decide that you want to buy something and be able to take it home with you that very day.  In the on line world of ordering from overseas you can easily wait two weeks or more.  Maybe for local retailers the focus has to move from mere marketing to logistics being just as, if not more important.  They all have a network of deliveries set up, why not utilise this to deliver goods to the customer in quick time, easily outstripping what the overseas supplier can do.

As an example, three weeks ago, after much umming and ahhing across a number of shops, my loving husband and I settled on a tall boy that we would like to buy for our bedroom.  We are not great at making decisions, so when we finally took the plunge and chose one we could both agree on, we happily trotted off to the sales assistant to buy it.  We fully expected to be walking out with it that day. And we could have if we elected to take the floor stock.  The floor stock model had a bit of a dickey drawer, so we instead opted to get a new one.  The sales assistant said sure, that will be two weeks, IF, there is any in stock in the warehouse.  Two weeks, from a local company, a large franchise represented around the country.  The owner of which has been one of the most vocal about imposing GST on imported goods.  Now remember, this was two weeks, IF it was in stock at the warehouse ( some 600km away).  Well it has now been three weeks and no sign of our tall boy, even though we have paid a large deposit on it.  This is appalling customer service and a dreadful system, that almost forces people to go on line.  If I am happy to wait two plus weeks I will search on line.  If I want it pretty much straight away the local retailer should win, hands down.  How can they stuff up this basic fundamental?  Competition should push them to improve their service, it doesn't seem to be happening.

After sales service is another area where the local retailer can triumph.  On line shopping, again requires you to take a leap of faith when dealing internationally.  We have consumer laws here that protect us, not so in the on line sphere when dealing with international sites.

Lets briefly look at some ways locals can enhance the customer service side of their business while utilising technology to its fullest.

 I have lost track of the number of times that I am in a shop and the sales assistant has sent me home to go on line and look up more of their product.. I get that they can't fit absolutely everything in their physical shop.  But it's sheer madness to send your customer away to navigate a website that is usually just pictures and minimal actual information.

If you are serious about your customer and providing the best service you can, you want to keep them in your shop.  Why not do what banks and now centrelink are doing and have some actual on line terminals in your shop. User friendly, loaded with your products, and with real life staff on hand to assist and give technical information.
Recently, we were shopping for tiles for our bathroom. Tiles shops can pile in loads of product in their floor space, but are limited in showing practical examples of how to use the tiles in various bathroom design concepts.  Surely having an on line catalogue of design concepts using their tiles would be great for the customer.  By having it available in the shop, the customer would then have access to the expertise of the staff while negotiating the logistics of employing certain design ideas in their personal situation.
Go back to our furniture shop.  Imagine an on line terminal where the shopper could see many more products than the shop can physically carry in their floor stock. They could pick and choose from an endless variety of styles and designs.  They could see concepts of how it looks accessorised or in different furnishing patterns within houses.  They would have access to knowledgeable, trained staff to answer the trickier and more technical questions.  They could place an order and either take it home that day or have it delivered within the week.  Surely most places in Australia should be able to manage delivery within the week.  It is all about logistics and providing exemplary customer service.

I could go on, but in the interests of brevity I shall leave it with those two take home messages.  Use the advantage of physical presence to enhance shopper experience through technology and excellent sales assistants, and sort out your logistics so that consumers can get their goods in a cheap and timely manner.  Do that and you have a serious leg up over the companies offering overseas products.  All they have is price, local retailers have much more value they can add to the shopping experience, if only they would try, and none of this has anything to do with GST.