“Showrooming” is a new phrase recently used by the Wall Street Journal in an article discussing what Target is attempting to do to solve the problem.
Showrooming is meant to describe the use of smartphones and tablet computers by consumers while in a store to buy the product they are interested in online, for a lower price then what the retailer is offering. We wrote about Amazon’s app that does just that a few weeks ago. Online retailers have an advantage of not charging sales tax (in some states) and, of course, they aren’t burdened with the expense of a show room.
Target wrote a letter to their manufacturers asking them to prevent this from happening.
“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 ExecutiveGregg Steinhafel and Kathee Tesija, Target’s executive vice president of merchandising.
Target would prefer that manufacturers provide them with products that are unique to Target and therefore can’t be shopped online. While that might be a good idea for Target, what about the small independent retailers out there who you rely on for your brand, can you realistically give them their own models on a national basis? No.
Showrooming effects the age old relationship between consumers, brands and retailers and therefore needs to be addressed. Retailers can’t be in business to demonstrate and service products that online retailers can sell at such a discount.
One idea worth considering is providing your retailers with their own online product catalog that allows retailers to include their price, service offerings and promotions in a mobile friendly format. Technically this isn’t that difficult to do and will give your retailers a chance to sell their service and promotions against the service challenged online competitors.