The ubiquity of smartphones has resulted in a new phenomenon in commerce, the act of “showrooming” a product at a brick-and-mortar store before buying online.
In one of the starkest signs yet that chain stores fear a new twist in shopping, Target is asking suppliers for help in thwarting “showrooming”—that is, when shoppers come into a store to see a product in person, only to buy it from a rival online, frequently at a lower price. […] “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,” according to the letter, which was signed by Target Chief Executive Gregg Steinhafel and Kathee Tesija, Target’s executive vice president of merchandising. Showrooming is an increasing problem for chains ranging from Best Buy Co. to Barnes & Noble Inc., at the same time that it’s a boon for Amazon.com Inc. and other online retailers.
I understand the logic at work here, but it’s a mistake. Target is asking manufacturers to create special products that are unique to their aisles. What’s going to happen is that some of these manufacturers will dilute their brands and offer alternately-labeled versions of their products that are only available at Target stores. Customers will quickly learn how to compare the common products with their Target-branded counterparts, and the problem will persist. Even if the producers create brand new products that are unique to Target, customers will quickly learn how to compare apples and oranges. There will no doubt be countless smartphone apps built specifically for this task.
This strategy is destined to fail. What’s worse, trying to force customers into a more confusing shopping experience can only harm Target’s brand. That being said, my main issue with Target has less to do with poor strategy and more to do with an overall lack of vision around the boardroom table.
The “showroom” door swings both ways, so to speak. Target is the beneficiary of the same phenomenon that they bemoan above. They just don’t see it.
We’re all guilty of showrooming to some extent, but the reverse is also true. Target is a store built for planned shopping, but they’re specifically laid out to spur impulse purchases. All good stores are. That’s why the milk is at the far end of grocery stores, the pharmacy counter is at the far end of drug stores, and the beer cooler is at the far end of convenience stores. We consumers don’t mind picking up an extra item or two on the way around the aisles. Wal-Mart actually sells some DVDs at a loss just to get you in the middle of their superstores. In that aspect, not much has changed about consumer behavior over the years.
But, in that same timespan, we shoppers have become very adept at mining the internet for quality reviews before spending our hard-earned money on what we consider to be large purchases. Large is relative to the individual shopper, but we all have learned to seek out third-party consent before making a decision. That consent used to come from a knowledgeable salesman, but it increasingly comes from the experiences of invested friends and strangers, also known as earned media.
If I go to Best Buy or Target to buy a HDTV, seeing and touching it in the showroom is just a part of the shopping process. It’s no longer a prerequisite, nor is it a decision-inducer. I pull out my smartphone in the store, find the item on Amazon, and browse through the customer reviews. If the virtual crowd has deemed it worthy of the price, then I’ll often buy it on the spot from the brick-and-mortar store. This is as close as it comes to a whim for savvy customers like me when large purchases are concerned. Amazon loses sales to “showroomers” like me because the actual showroom is fifteen minutes from my home.
Target and similar retailers should embrace showrooming. Being able to put tangible products into the hands of customers at the precise moment they’re motivated to buy is a competitive advantage over Amazon.com. A shift in messaging would make this difference clear to consumers. If Target’s management had the vision necessary to embrace change and tailor their offering to their customers’ desires, they’d be on the offensive rather than the defensive right now. As it is, they’re acting like Eckerd Drugs did when Walgreens came to town. You don’t see too many Eckerds anymore, do you?