Over the past month, I have visited two electrical retailers - JB Hi FI (four or five times) and Harvey Norman (just once).
JB Hi-Fi Vs Harvey Norman
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These visits highlighted two things to me: firstly, there is very little difference in the products they sell (within the categories they both focus on); and secondly, the shopping experience is entirely different, with JB coming out well ahead.
It was noted by a colleague after my fourth visit to JB Hi-Fi that it is a very expensive store. My responses to this were two-fold: I hadn’t noticed, but she was probably right, and I didn’t care. I will still go there ahead of Harvey Norman, any day.
The outstanding feature of JB was the service. Well-informed staff approach quickly, but without being pushy. They provided the service required, without trying to take over. If they are not needed they go away.
On all the purchases I have made there, paperwork has not been an issue and unlike Harvey Norman, they did not demand my phone number or keep records pertaining to me on their data base.
Experiences with JB Hi-Fi and Harvey Norman reminded me just how many stores sell much the same products, thus limiting their differentiation potential to price and service. It was also a reminder that excellent service makes price so much less important.
For many retailers and businesses, there is a significant opportunity to make service a strategic competitive advantage.
Harvard professor Michael Porter coined the phrase strategic competitive advantage, highlighting the potential of a sustainable strategic competitive advantage to set a business apart - reducing the cost of marketing and, more specifically, communication.
Porter makes the point that while many businesses promote what they claim to be a range of points of difference, it is far more effective to focus on just one, deliver on it consistently and then become well known for it.
For businesses that sell much the same products - eg: JB Hi-Fi and Harvey Norman, Myer and David Jones, Coles and Woolworths, Kmart and Big W – price is very often the most obvious differentiator, but not always the best. Service has the potential to be a very powerful strategic competitive.
Why do so many so called great Australian businesses offer such poor service, while others benefit from such good service.
I hate Harvey Norman and I am impressed by JB Hi Fi. Perhaps that is why JB Hi Fi is doing so well these days.