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Showrooming: Target Stays Ahead of the Curve

Now that 53% of the cell phones in the United States are smartphones, the practice of in-store comparison shopping is of increasing concern for retailers. Consumers are now capable of walking into a store to get the benefits of a sales staff and a closer look at products, but then instantly looking up prices on the internet to buy a product elsewhere. This practice of “Showrooming” is a major issue because if a potential customer finds the product at a lower price elsewhere and completes the purchase, the sale is lost. There are a few ways to combat this practice: Improve the in-store experience so consumers want to purchase right away, offer exclusive merchandise, or ensure that products are offered at a price lower than any online. Of course given the overhead involved with a brick-and-mortar location, offering a price lower than an online-only retailer is often a losing proposition.

Target is implementing a tactic along the lines of reverse in-store pickup. Toys featured on the fronts of aisles will be displayed next to QR codes which allow shoppers to purchase the items and have them shipped home for free. This is particularly valuable around the holiday season, when keeping purchases a secret is important. Additionally, Target is selling exclusive items and bundles offered at a discount not available from other retailers. Says VP Sales at JAKKS Pacific, Inc Dan Cooney, “Any retailer whose point of difference isn’t based on having the lowest pricing every day lives and dies by exclusivity- They need a marketable point of difference that they can compete with other than price.” Some chains such as Walmart and Macy’s are investigating drive-through pick-up as well.

Best Buy is implementing a different type of exclusivity- they replaced barcodes on products in retail locations with chain-exclusive ones that cannot be scanned by smartphones in order to compare prices- however, this has enormous potential to backfire and irritate potential customers. We suggested a few weeks ago that retailers take advantage of smartphones and treat them as salespeople- Target has hit the mark again on this front with their branded app, which offers incentives for purchases and can serve to distract smartphone users from comparison shopping.

The omnichannel consumer is a force to be reckoned with- they expect clear brand presence across all media outlets as well as in-store, and want to shop on their own terms. Is your brand up to the challenge?

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Posted

October 8, 2012

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