Showrooming is a new phrase used to describe consumers who use their smartphone or tablet computers while they are in the store to find a better price and buy elsewhere. Earlier we blogged about how Target wants to sell only unique products to defeat the practice and they have the muscle to demand that from their vendors, most retailers aren’t that powerful.
Now, according to this article on internetretailer.com, Samsung and Sony are helping solve the problem by mandating stricter pricing policies for their televisions to level the playing field between online and offline.
The policies, if the manufacturers can enforce them, will limit price competition among consumer electronics retailers online and off. That may help stores negate some of the impact of shoppers coming to stores to check out and test a new TV model but purchasing it online where they may find it priced for less, a consumer habit increasingly referred to as “showrooming.”
Their are several issues with this approach, one is legal and that seems to be going in the favor of manufacturers,
Manufacturers can legally decide not to do business with retailers that sell below a minimum price set by the manufacturer. Historically, the courts have viewed such MAP policies as legal as long as they are unilateral—that is, there is no negotiation about prices between suppliers and retailers. However, a June 2007 U.S. Supreme Court decision, Leegin Creative Leather Products Inc. vs. PSKS Inc., gave manufacturers greater leeway to impose MAP policies.
The more difficult issue is around what the competition does,
It probably won’t help that competitors in the TV space like LG and Panasonic haven’t instituted similar guidelines, which will leave retailers free to discount those sets as they see fit.
Showrooming is here to stay and if you want your independent retailers to stay in business than you have to help them with this challenge. One major step that isn’t covered in the article but should be on your list of things to consider is providing your retailers with a mobile ecommerce site for your products that will at least put them and your brand in the game. By partnering with your better dealers to build mobile ecommerce sites you will be in a better position to monitor and even control MAP.