Is "SHOWROOMING"
The Death of Local Retail As We Know It?
You might already have done it yourself -- and felt a little guilty about it in the process.
"Showrooming" is the practice of using local stores to check out a product, but then ordering that product for less money online, often while still standing on the store carpet in front of frustrated sales people.
Brick and mortar retailers loathe the practice, implying that it is somehow morally reprehensible. They have to pay for showroom real estate and for the employees to run those showrooms. Shoppers are exploiting this service when they use those stores to get hands-on time with a product but then buy it from online retailers like Amazon. The economics make it impossible for traditional retailers to compete, and smartphone apps like Shop Savvy make it extremely easy.
SUMMARY
WHAT IS IT: "Showrooming" is the practice of using local stores to check out a product, but then ordering that product for less money online.
Trend is happening all across Europe and in the U.S., experts say.
Retailers are fretting about showrooming, expect it will explode this holiday season.
"Onlining" -- searching for products and reviews online, then heading back to stores -- may help.
Indeed, it has become a worldwide phenomena, according Jurgen Boyny of global research firm GfK Group. At a press conference for the forthcoming 2012 IFA consumer electronics show that will take place in August in Berlin, Boyny pointed out that it is happening all across Europe and in the U.S. And retailers are definitely fretting about the trend, which many expect will explode this holiday season.
Best Buy, for example, just lost $1.7 billion in its most recent quarter, and then announced layoffs, store closures, and the resignation of its CEO (although the change at the top may not be solely due to poor financial performance). Even stores not focused on electronics are feeling the pinch. To combat showrooming, Target is using its marketing muscle to pressure suppliers to provide its stores with exclusive products -- ones you won't find online.
Personally, I don't want a world without stores.
While you can preview a movie, a CD, or even a book online, you can't try on a pair of shoes or push buttons on a stereo system on the Web. You can't sample a cheese or check out a tablet online. We still need brick and mortar stores, but what can retailers do?
The exclusive in-store product approach certainly won't work. Shoppers are too smart to be fooled by changing a feature or model number; they'll simply find similar products online and buy them. More important, such a maneuver does nothing to help small, local retailers. Panasonic isn't going to build an exclusive product for Joe's Electronics down the block.
There is a countervailing trend, however, that might bring more people into stores. Call it "onlining" -- the reverse of showrooming.
Car buyers, for example, spend an average of 8 hours doing it, according to Lincoln. People buying big-ticket items like refrigerators do it. Even people shopping for a home do it. You search for products and reviews online, learning the differences between models, energy efficiency ratings, reliability issues, etc.
Then you select the models that pique your interest -- and walk into the local store to see and test the product in person -- and usually make the final purchase there.
"Now consumers come into the store saying, 'I know everything,' " points out Boyny, which can be daunting for retailers. The traditional approach was to have sales people help customers make a decision. Today, the customer may often know more about a product than the sales assistant.
However, by making it even easier for this new type of onlining customer, stores may be able to entice them to buy on site rather than online.
"Shopping is possible everywhere," Boyny said. So retailers need to recognize this fact and use the technology to reach customers in novel ways. Specific store apps with rewards and notices of upcoming sales can help. But more innovative approaches will be needed.
One example was an experiment by grocery giant Tesco. In a Seoul, South Korea, subway station the company installed a virtual store displaying popular foods. While waiting for the train, shoppers could scan items and order them immediately. Ultimately, the idea is to allow the orders to be picked up at the store or delivered by the time the weary commuter arrives home.
Now that's an approach that could save us all from wasting time, or living with a guilty conscious.
Follow John R. Quain on Twitter @jqontech or find more tech coverage at J-Q.com.
Read more: http://www.foxnews.com/scitech/2012/04/18/ethics-showrooming-and-what-to-do-about-it/#ixzz1sP4PeC4w
"Showrooming" is the practice of using local stores to check out a product, but then ordering that product for less money online, often while still standing on the store carpet in front of frustrated sales people.
Brick and mortar retailers loathe the practice, implying that it is somehow morally reprehensible. They have to pay for showroom real estate and for the employees to run those showrooms. Shoppers are exploiting this service when they use those stores to get hands-on time with a product but then buy it from online retailers like Amazon. The economics make it impossible for traditional retailers to compete, and smartphone apps like Shop Savvy make it extremely easy.
SUMMARY
WHAT IS IT: "Showrooming" is the practice of using local stores to check out a product, but then ordering that product for less money online.
Trend is happening all across Europe and in the U.S., experts say.
Retailers are fretting about showrooming, expect it will explode this holiday season.
"Onlining" -- searching for products and reviews online, then heading back to stores -- may help.
Indeed, it has become a worldwide phenomena, according Jurgen Boyny of global research firm GfK Group. At a press conference for the forthcoming 2012 IFA consumer electronics show that will take place in August in Berlin, Boyny pointed out that it is happening all across Europe and in the U.S. And retailers are definitely fretting about the trend, which many expect will explode this holiday season.
Best Buy, for example, just lost $1.7 billion in its most recent quarter, and then announced layoffs, store closures, and the resignation of its CEO (although the change at the top may not be solely due to poor financial performance). Even stores not focused on electronics are feeling the pinch. To combat showrooming, Target is using its marketing muscle to pressure suppliers to provide its stores with exclusive products -- ones you won't find online.
Personally, I don't want a world without stores.
While you can preview a movie, a CD, or even a book online, you can't try on a pair of shoes or push buttons on a stereo system on the Web. You can't sample a cheese or check out a tablet online. We still need brick and mortar stores, but what can retailers do?
The exclusive in-store product approach certainly won't work. Shoppers are too smart to be fooled by changing a feature or model number; they'll simply find similar products online and buy them. More important, such a maneuver does nothing to help small, local retailers. Panasonic isn't going to build an exclusive product for Joe's Electronics down the block.
There is a countervailing trend, however, that might bring more people into stores. Call it "onlining" -- the reverse of showrooming.
Car buyers, for example, spend an average of 8 hours doing it, according to Lincoln. People buying big-ticket items like refrigerators do it. Even people shopping for a home do it. You search for products and reviews online, learning the differences between models, energy efficiency ratings, reliability issues, etc.
Then you select the models that pique your interest -- and walk into the local store to see and test the product in person -- and usually make the final purchase there.
"Now consumers come into the store saying, 'I know everything,' " points out Boyny, which can be daunting for retailers. The traditional approach was to have sales people help customers make a decision. Today, the customer may often know more about a product than the sales assistant.
However, by making it even easier for this new type of onlining customer, stores may be able to entice them to buy on site rather than online.
"Shopping is possible everywhere," Boyny said. So retailers need to recognize this fact and use the technology to reach customers in novel ways. Specific store apps with rewards and notices of upcoming sales can help. But more innovative approaches will be needed.
One example was an experiment by grocery giant Tesco. In a Seoul, South Korea, subway station the company installed a virtual store displaying popular foods. While waiting for the train, shoppers could scan items and order them immediately. Ultimately, the idea is to allow the orders to be picked up at the store or delivered by the time the weary commuter arrives home.
Now that's an approach that could save us all from wasting time, or living with a guilty conscious.
Follow John R. Quain on Twitter @jqontech or find more tech coverage at J-Q.com.
Read more: http://www.foxnews.com/scitech/2012/04/18/ethics-showrooming-and-what-to-do-about-it/#ixzz1sP4PeC4w
