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Show(room) Me The Money!

How consumers are using retail stores for everything…except purchases.

As retailers are going through a consumer revolution in the way you perceive and purchase products, there is a new issue on the horizon that is impacting big-box, category-killing retailers like Target, Wal-Mart and Best Buy – called “show rooming”.

If you have ever gone to a retail store (“brick”), found and examined the product you were looking for, and then went home to buy it online (“click”) you “show roomed”.

You scoped out the merchandise, but understandably wanted to pay the best price – which you found on the Internet. Regardless of the wait and the shipping and handling, you bought it electronically and saved. So, if you are the retailer who lost out on the sale, now what?

To combat this problem retailers have resorted to new approaches that will hopefully further benefit the consumer buying experience:

  • WORK WITH MANUFACTURERS TO MAKE EXCLUSIVE PRODUCTS. It can’t work for the little guys, but the big-box retailers have enough clout to request and offer unique goods not available anywhere else. Unique goods that you can defend as a reason for your retail loyalty.
  • OFFER COUPONS DIRECTLY TO CONSUMERS VIA MOBILE PHONES.  Daily-deal alerts, exclusive discount paperless coupons, and loyalty reward specials are easy to pick up and use right at the cash register with your smart phone. These are the equivalent of personalized prices and may be the most strategic way retailers will beat the web competition at their own game.
  • EMPHASIZE IN-STORE PICKUPS FOR ON-LINE ORDERS. As a consumer, you won’t have to pay the shipping fee and can have the instant gratification (well, almost instant) within the hour. Retailers get insure that you bought at their website and no others. Maybe while you are picking up your new DVD player at the store you might buy some DVDs and popcorn too.
  • HAVE RETAIL CLERKS SEND CUSTOMERS TO THE WEBSITE IF THE PRODUCT ISN’T ON THE SHELF. Under the category, "if you can’t beat them, join them" credit the online purchase to the store closest to the address of the customer who ordered via the Internet.
  • MAKE THE PROCESS SEAMLESS.  Invest in computers and tablets for the retail store associate/retail selling floor to identify your previous purchases and make it easy to get what you want, when you want it, no matter where you are -- at the store or at the home computer.
  • AND BE AWARE OF THE FUTURE. According to a recent Advertising Age study and report on retailing, “giants such as Amazon, eBay, Google and Living Social are all looking into the potential of physical stores.”  

Just what we need…even more choice.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Lauren B. Lev May 07, 2012 at 05:42 PM
One of the issues to consider is prior to digital/ecommerce, consumers who were "cash rich and time poor" had an option of direct marketing -- catalogs, inbound telemarketing, direct mail, etc. to order products without benefit of a retailer. Digital has its backbone in this discipline, but direct marketing didn't destroy the brick/mortar retailers either. They just added to the noise -- with another distibution channel and choice. That is what we are experiencing here, as I do not believe the retail store operation can ever fully go away.
John Cocchiola May 07, 2012 at 06:40 PM
I don't think digital killed, or is killing brick and mortar stores on its own, it's getting a lot of help, but it seems to me that it's inevitable, at least when it comes to books and music that stores are on their way out. My Mother is 95, she uses and loves her Kindle because she can make the font as large as she needs to. If I owned a bookstore and I saw a 95 year old with an e reader, I think I'd worry. Barnes and Noble partnering up with Microsoft looks a little like a hedge, they're looking ahead. What do you think the value of the the brick and mortar part of Barnes and Noble is? I have no idea, but I'd bet it's not 600 million, which is what they got for only 17% of the Nook portion of their business. Can 17% of their digital business be worth more than 100% of their business? What do you think the overhead (rent, taxes, maintenance, power/light and payroll) is on on that Barnes and Noble on the corner of Glen Cove Road and Old Country Road? How about the one on the Miracle Mile? Manhattan? I haven't bought a CD in more than five years, I haven't bought an actual book in more than two, it's just about all digital now. Even the people that like first editions and rare books, thanks to E Bay, the dusty old stores are almost all gone. I'm not saying any of it is bad, not at all. I think it's just something that happens.
John Cocchiola May 07, 2012 at 08:57 PM
Btw...I hope you don't think I'm arguing, I'm just having fun kicking this stuff around. I'm amazed at how people, how businesses 'make' money, and I think it's more challenging now than ever. When I see a huge store, like a Barnes and Noble or a Best Buy, and I think of all of the things it takes to make that store profitable, and I think of the obstacles they need to overcome, the costs, it's a wonder they can keep their doors open, even in the good times.
Lauren B. Lev May 08, 2012 at 12:24 AM
Continuing the book retailing analogy, part of the reason, to my understanding, about why B&N has survived this long, was due to B&N embracing online sales and the e-readers and technology. According to web reports, Borders at the same time invested in more and better retail outlets, an inventory of CDs and DVDs (as the world was going digital) and of course, no e-readers. They had, for a time, used Amazon to manage their online activity as well -- rather than integrating the store and the site internally. A bunch of mistakes leading to bankruptcy.
John Cocchiola May 08, 2012 at 02:22 PM
No doubt, but with more an more people buying electronic files to replace actual books and music, the actual stores will become less and less profitable. I sure wouldn't invest any money in them. Look at what e mails and online bill paying did to the post office. They lost 3.3 billion dollars in their fist quarter of this year, which is supposed to be their best quarter. They don't need to adapt, the tax payer is on the hook for their losses, but if they were a business, they'd have been long gone.

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