Retail upstart Kogan is determined to lure Australian shoppers online with discounts on products that are but a twinkle in the manufacturer’s eye.
Kogan’s latest innovation, LivePrice, allows consumers to purchase pre-production goods at “up to 50% off the retail price”. The further along the retail chain the product is, the smaller the discount.
According to serial entrepreneur and self-described retail underdog Ruslan Kogan, LivePrice is yet another example of his company finding a better way to create and deliver.
“Other retailers are out there asking the government for new taxes and regulations to help entrench their market positions. We are focused on innovating to create the best value products for shoppers,” Kogan said.
“LivePrice harnesses the openness of the internet to cut out the hidden cost of finance built into price tags of all goods. Kogan LivePrice gives the power of choice back to the consumer and will change the way we shop.”
In other words, Kogan is highlighting the fact that manufacturing new products involves up-front costs — most notably, cash, which attracts interest, adding to the final retail price. By inviting customers to pay early, Kogan is reducing its need to borrow (or spend) interest accruing (or earning) capital.
We’re not sure how this model will saves “up to 50% off the retail price”. But the concept is an exciting one and we are sure that the retail market will be watching with interest (and perhaps a small amount of trepidation).