Economics 101: Sell more stuff

22nd February 2006, Comments 0 comments

The government likes to blame France's current economic malaise on the country’s restrictive labour laws. And they certainly play a part. But American retired executive Paul S. Lessig says the government, retail and service industries here seem to be missing the obvious: get out there and sell things!

*sidebar1*I am an American who chose to retire in France. Since my arrival in 2002 I have avoided commenting on local economics. After a 45-year career as a senior international marketing executive, I felt that I had earned the right to refrain from such commentary.  Moreover, even though I was a tax-paying property owner, I was mindful that I was still a guest of the French people.

Still, I review the daily French financial news with sincere interest. And today, I make an exception when I wish that the French economic leaders would concentrate on what really makes an economy work: selling things. 
The French government is not wrong when it asserts that France’s economic malaise is seeded in the country’s restrictive labour laws, resulting in high unemployment, excessive costs associated with social service offers, and an overvalued euro. 

But my past professional experience and my current experience as a consumer in France tell me that nothing will get better until more people start selling more things.

Here's the economics lesson: every successful economy will reveal one, basic element, namely, a product manufacturing and sales service structure that targets its consumer base. Plus each possesses a large middle-class of consumers that are able and willing to consume. 

Regretfully, based on my observations and experience during my residency here, France falls short in respect to both these essential elements.
I could chose from a long list of examples of failures on the part of French consumer-product producers, not to mention customer services industries.

Washers and dryers

My American machine accommodates 22 pounds and a cycle takes 30 minutes

But let's just take one, and one we all use: clothes washers (and dryers). 

When I came to France, I brought with me an American electric washer and dryer.  (As an aside, by French standards, they are considered “Industrial” equipment and some years ago required a 'license' to be purchased.)

The overall size of these appliances are little more than similar appliances available in France.  Yet my washer accommodates 22 pounds (10kg) of laundry per cycle. The dryer holds the same amount of wet laundry. Wash time, depending on who dirty your laundry is, is a maximum of 30 minutes. Dry time for a full load of laundry is a maximum of 55 minutes for most varieties of laundry. 

Considering the high cost of electricity in France and the damp weather in at least my part of the country, they are an efficient choice of appliances. My cost: US $350 for the washer and US $330 for the dryer. (At current foreign exchange rates, EUR 290 and EUR 275, respectively.)
But let's look at your average French washing machine, which, at best, can accommodate only 5-7kg of laundry and will require almost 1.5 hours to complete a cycle. The average French dryer holds about 6kg and, depending on the type of laundry, require as much as 2.5 hours to complete a cycle. 

Cost of a consumer washing machine in France runs between EUR 280 and EUR 700; the average cost of a matching dryer is EUR 600. 

Paul S. Lessig

Again, considering the high product cost and electricity consumption involved, not a very appealing consumer offer. As a result, while most French households have a clothes washer, very few possess a dryer.  One would think that French manufacturers of clothes washers and dryers would elect to offer the consumer a product that is equal in efficiency and cost as is available in other parts of the world.

Closing time
Now let's move on to Inventory Control and Customer Service, two issues that probably cause the most damage in respect to French economic growth.

Inventory management is not rocket science. First, French product producers and retailers should be reminded that “you can’t sell anything, if the customer can't get at it”.  Specifically, store closures between noon and 2pm is shooting oneself in the foot. 

The average consumer has a limited amount of time to shop. Shopping in the morning on weekdays is, for most, not an option.  In France, most merchants don’t open until 9am.  After work shopping only gives the customer an hour since most in-town merchants close at 6pm (8 or 9pm for many big shopping centres).  On Sunday, most stores are closed. 

Therefore, Saturday is the only time customers really have time to shop. 

Similarly, discounting is restricted to government-authorized periods, les soldes and this cuts off an important sales stimulus for much of the year. 

*quote1*Leaving aside the question of cultural traditions, if France wants to improve upon its current economy, its retailers and service-providers need to match how they do business to how customers live and shop.

Product producers should concentrate on offering quality goods at fair market prices. 

Retailers should assure that quality products are stocked and always readily available.   

Finally they could benefit from learning the age old, tried and true, motto of every successful enterprise: “The customer is not always right – but he/she is never wrong!”
February 2006

Copyright Expatica

Subject: Living in France

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