Retailers fight showrooming for holiday shopping

The increasing frequency of a practice known as “showrooming” is taking a serious bite out of sales for brick-and-mortar retailers. Many of them are fighting back by agreeing to match the prices of their online competitors.

Showrooming usually yields lower price

Showrooming is an increasing trend that is good for frugal-minded shoppers, but not so good for retailers. It is the habit of using a handheld device in a store to comparison shop with online competitors for substantial savings. According to CBS, even the rock-bottom prices at a box store like Wal-Mart are still an average of 9 percent higher than those that can be found online.

A recent study by CouponCabin.com revealed that 40 percent of smartphone or tablet device owners have taken their device into a store for the purpose of comparison shopping on the fly. Ninety-seven percent of those shoppers admitted to consequently buying the item from an online competitor. Simultaneously, the National Retail Federation also said that, for the first time, more than 50 percent of holiday shoppers will do at least some of their holiday buying online this year.

Retailers fight back with price matching

In order to fight back against showrooming, Best Buy and Target have both announced that they will match the prices of some online competitors.

Jack Otter, the executive editor of CBS Moneywatch.com, said retail stores are struggling for their very lives:

“This is a sign of desperation. They’ve seen Circuit City go under. Best Buy is on the ropes. So they’ve said, ‘OK, whatever those guys are doing our competition is killing us, we’ll match the price.’”

BestBuy price matching offer

BestBuy says it will match the prices of appliances and electronics from several online competitors, including Amazon, NewEgg and Tiger Direct. The deal runs through the entire holiday shopping season — November 7 through December 27 — with a short break for the week following Thanksgiving, now nicknamed Cyber Week, when the volume of shoppers in stores will make the time-consuming process impractical.

Target price matching offer

Target is making a similar offer. During the period from November 1 to December 16, it will match the prices from Amazon and from the websites of some other brick-and-mortar retailers. It, however, is extending the deal even through Black Friday and so-called Cyber Week.

Wal-mart duels with Amazon

Wal-mart is also trying to match the convenience of shopping on Amazon.com. It is trying out a new same-day delivery service, competing with the online retail giant’s Local Express Delivery pilot program.

Sources

CBS
The Motley Fool
Daily Finance