Many consumers are now practicing “showrooming” — checking out merchandise in stores and then purchasing it from a less-costly online source — and it is costing retailers business. Some of them are fighting back.
Showrooming more and more common
The economic downturn has made bargain hunters out of most of us. Now, some shoppers are going into stores to take pictures of merchandise, with no intention of buying. They go home, enter the items they want into a search engine, and find it for a much lower cost online. It’s great for them, and great for the online merchant. But what about the brick-and-mortar retailer?
Hurts the retailer
Time Magazine’s Brad Tuttle wrote:
“Most consumers don’t really care how, or even if, a retailer makes money. All they care about is which one has the best products at the cheapest prices. The ideal situation is one in which they can inspect merchandise in person, and then buy it at the cheapest price without having to schlep it to and from the car, and without having to pay extra for delivery.”
Target reacted in January with a letter to its suppliers. It read, in part:
“What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands.”
Could the trend toward e-commerce eventually make brick-and-mortar stores obsolete? Some retailers are not taking it lying down.
Best Buy strikes back
According to the Wall Street Journal, Best Buy, the electronics box store giant, is taking its strategy from the Apple Store model. It is testing out a new program in a Minnesota store in which it provides a help desk manned by its tech-savvy “Geek Squad,” in emulation of Apple’s Genius Bar.
Also borrowed from Apple, it intends to have pay stations throughout the store so that customers do not have to wait in long lines to check out. It also intends to close 50 of its 1,100 stores and convert many of the reaming ones into the friendlier new format.
The idea is to make the stores more friendly and helpful, in the hopes that consumers will find the shopping experience easier and more inviting.
Best Buy stock has lost 50 percent of its value since its market high in mid-2010. Much of its business has been lost to online retailers like Amazon.com.
Efforts of other retailers
According to the New York Times, other retailers are fighting showrooming by integrating their online presence into daily brick-and-mortar store operations. By adding things like online return centers, pickup locations and payment booths, Wal-Mart, Sears, Macy’s and others are hoping to lure shoppers back out of the house.
A sign of the times?
Whether or not these strategies will be effective remains to be seen. The fact is, online shoppers don’t even have to get dressed to shop, and they generally spend less money as well. That is very hard to fight. Could we one day see a world where all retailers exist in cyberspace and the art of pushing a shopping cart becomes a quaint relic of the past?