

Will 'showrooming' kill businesses? - kjhughes
http://www.cnn.com/2012/06/17/opinion/greene-showrooming/index.html

======
TwiztidK
While I certainly use stores as showrooms quite a bit, mostly book stores
since I usually just look for books to buy used or for my Kindle, but if they
can manage to impress me with their service and they have reasonable prices, I
will buy from them.

Years ago a 15 year old version of myself ventured into a few stores looking
for an HD TV to go with my PS3. I was already pretty knowledgable about the
TVs and I had found a few online for $600-700 (At the time, this was pretty
much as cheap as they came) that seemed decent and I wanted to take a look at
them in person before buying one. I think I went to Walmart, Best Buy, Target,
ABC Warehouse, and finally Circuit City. At almost every store the
"salespeople" knew almost nothing about what they were selling and there
products were way too expensive for what they were. The only store that stood
out to me was Circuit City. Not only did they have a good selection of quality
TVs but the salesman I spoke with impressed the hell out me as he was the
first that knew more about the TVs than I did. After I told him I was going to
use the TV with my PS3, he grabbed an open PS3 from their storage room and
hooked it up to a few of the TVs so I could try them out. I was so impressed
by the level of service that I went back to the store the next day and bought
an $800 TV (I think it was available online for $750 at the time) and I have
never regreted the price difference.

As long as brick & mortar retailers can offer service beyond what an online
retailer can do, they will do fine.

~~~
maxerickson
Circuit City proceeded to get rid of their knowledgeable sales force and
eventually declared bankruptcy.

Not sure what that means in this context.

~~~
vampirechicken
It means that Circuit City decided to sell sizzle instead of steak.

------
martin-adams
It's a sad truth that it costs more to run a brick and mortar business than an
online one.

But the way I see it, a customer will enter their business and identify
products that are of interest. Those people have the technology to compare
prices in real-time in that store. If that price was no more expensive, what
incentive would a customer have to not buy it there an then from the store?

In the UK I've felt the quality of a customer experience has gotten worse.
Staff ignore you when you are actually trying to find a product, but bug you
when you're 'just browsing'. More often than not I'm left with the feeling
that they just don't want my money by the lack of helpfulness.

Brick and mortar businesses are selling a service, not just a product. That
service is a person to help you, products to see in person before buying and
stock to buy immediately. But at the end of the day, it will probably come
down to price. If they simply can't compete on price, then the outlook doesn't
look good.

~~~
switch007
I feel (in the UK) they have given up and accepted they just need to sell to
people who aren't inclined to shop around, or are 'old-fashioned' and will
want to go to a shop regardless.

So often I have been in Comet/Currys/PC World etc and seen older people told
they need a £40 HDMI cable, or "this is the last one in stock, it's a great
price - shall we go to the paperwork" etc.

I think they know their market and don't want waste time on people who know
the real prices of items, who are willing to shop around, haggle and so on.

~~~
Silhouette
_So often I have been in Comet/Currys/PC World etc and seen older people told
they need a £40 HDMI cable, or "this is the last one in stock, it's a great
price - shall we go to the paperwork" etc._

I find that sort of thing really irritating. It's mis-selling, and as such it
is almost always illegal, but it's close enough to plausible that most people
who would be in those stores in the first place won't be confident enough to
challenge it.

There's also a certain arrogance about some stores these days, and not just
the ones staffed by 12-year-olds. I went to buy a new iPad a few days after
they launched. Apple somehow seemed to be price-fixing without getting called
on it, because _everywhere_ was charging the _exact_ same price for a high-
value, prestige product in short supply, which doesn't sound like a
competitive market to me. Still, I figured if those were the rules of the game
then I might as well go where they seemed most likely to have stock: the Apple
store.

Two Apple staff eventually asked if they could help me. I told them exactly
which model of new iPad I wanted. One said that he didn't think they had any
in stock and wasn't sure when they'd be back in, but he'd go and check. He
came back several minutes later, having apparently sent someone else off to
check the stock for him in the interim, and proudly declared that he was
right: they really didn't have the product I wanted that was advertised all
over their window display, and they really didn't have a clue when it would
next be available. Then he grinned bizarrely, as if I was supposed to be
impressed by his awesome level of customer service or something.

I walked next door to John Lewis, where I easily found a friendly member of
staff, who in turn walked about five metres to a terminal and told me within
about ten seconds that they did have what I wanted. She then personally went
to the store room and returned two minutes later with the correct box,
personally checked that she really had found the item I wanted, and put it
behind the till reserved for me until I was ready to leave.

Guess where I'm going next time...

------
danmaz74
This was coming and it could really be disruptive, but brick and mortar
businesses closing down isn't the only option.

For example, they could start asking brands not to allow online sales if they
want to be stocked; I can easily see the more expensive brands only being
available off-line. Or they could ask people who enter the store to pay for a
redeemable voucher.

~~~
schiffern
>asking brands not to allow online sales

The suppliers aren't stupid, they see where this is going. Any wholesaler who
agrees to that clause deserves what happens next – being overtaken by their
more forward-thinking competitors.

~~~
gaius
Not true, you'll find a lot of luxury goods have done this for years, e.g.
high-end watchmakers. The only online retailers for them are websites of
brick-and-mortar stores, or the grey market.

------
sophacles
Here is what I think would be a great way to "fix" this problem:

1) Amazon, Newegg, etc come out and say "we love local businesses" - because
honestly, who doesn't have their favorite local shops, knowledgable people who
know you is great. They admit they have been hurting local businesses, and
that they have an unfair advantage because of this show-rooming behaviour by
consumers.

2) They roll out a "showroom affiliate" program. Businesses can sell the
products, but they also can have a QR code or similar, with a "or get it on
amazon!". This provides a commission to the store, recognizing that they
played a part in the sale.

3) the show-rooming is not as harmful to the stores, the online retailer
doesn't lose sales, and everyone can settle to a new balance.

This also gets the online retailers good press and warm glowies.

~~~
rprasad
Alternatively, the preferred solution by most states and retailers is to
simply end the subsidy for online retailers and require them to collect sales
tax.

Before computers and databases, it was a valid excuse to say that merely
calculating sales tax was burdensome for a retailer. Today, calculating and
collecting sales tax is trivial--there are dozen of SaaS providers for online
retailers, including Amazon itself.

~~~
patrickgzill
It is not a subsidy - it is part of the Constitution... you cannot put a tax
on items that are coming from another state.

As well, it wouldn't matter, because the price differences on most items would
still be a lot more than the sales tax. No one would go online if the only
difference was 6% or 8% sales tax. We are talking 20-30% differences in some
cases.

~~~
rprasad
You most certainly can put a tax on items coming from another state. The
Constitution merely prohibits a _discriminatory_ tax on items coming from
other states (i.e., a tax that is not equal to the same items coming from
sources in your state).

~~~
patrickgzill
I would be interested to hear your take on Quill Corp. v North Dakota then...
unless I am mistaken, even other states, such as Connectibut, agree with the
main thrust of my post ...
[http://www.ct.gov/drs/cwp/view.asp?a=1514&q=268516](http://www.ct.gov/drs/cwp/view.asp?a=1514&q=268516)
\- that they are not allowed to tax items delivered by common carrier, coming
from another state.

What you may be talking about is the use (I call it property tax) tax that
some states wish to levy on property that comes into the state and remains in
the state. I agree, there would be no difference between items regardless of
their origin in such a case.

~~~
rprasad
Quill does not hold that you cannot tax items sold from other states and
brought into the taxing state. It merely hold that the selling entity must
have sufficient nexus to X state to justify the imposition of a sales tax.

However, fundamental to Quill was the burden that calculating a sales tax
would impose on the retailer. In the times of Quill, _incidental_ sales (in
the case, less than a dozen over several years) to customers in North Dakota
were not enough to justify the burden of imposing a sales tax; it would have
cost Quill more to figure out the sales tax owed than Quill would make from
the sale.

But technology has changed. The concerns raised in Quill are non-existent
today; it is trivial and dirt cheap to calculate and collect a sales tax for
all taxing jurisdictions in the U.S.

Amazon knows this; that is why it has always backed down when states threaten
to pursue this issue in court (i.e., NY, Cali, and Texas). Indeed, Amazon now
offers a sales tax calculation service to smaller etailers.

 _Note that most legal commentators agree that Quill could easily (and
probably would) have gone the other way if the catalog company in the case had
sold to more than a handful of customers in North Dakota._

------
toyg
The truth is that retail, conceived as "the business of distributing items to
shopping centres where consumers will converge and buy them", is on its way
out. The business will become "providing customized/tailored services related
to products" (e.g. Apple's "geniuses") or indeed showrooming (where _producers
pay retailers_ to exhibit their products and optionally collect orders).

This has been coming since the 90s, but I bet it will still take a long time
to move on. What is unclear is how much this will impact employment: there's a
good chance that new models will not require the same (massive) amount of
labour currently employed in retail.

------
spobo
Showrooming is done to decide what product to buy over another or get a quick
overview of what's current and available. These things are not impossible to
do online. If anything they are much more powerful since they can be
customized. Amazon understands this and I'm sure they are investing a lot of
money to improve the experience. This experience will only improve online.

There will most definitely be a tipping point where the brick stores will see
most of their revenue disappear to online shops ... regardless of showrooming
happening in their stores or not. Online is just the way to go.

~~~
icebraining
For many things it's perfectly possible to create excellent online
"showrooms", but there's also plenty of products where feeling and trying on
is very helpful, or even crucial.

The only real alternative for those is buying multiple items and then
returning the ones you don't want; I wonder what's the efficiency of one
versus the other, in terms of time, money and energy.

~~~
spobo
The solution could be 'showrooming' locations paid for by online vendors that
are only accessible to their customers.

It's still a win/win since they won't need to hold stock and multiple vendors
can share the same locations. So it will still be a lot cheaper than the
current way of doing things.

But you have a valid 'wondering' :p I wonder the same.

------
jcromartie
Every time I go to Best Buy, I regret it. It's not because there aren't things
that I want to buy. It's because I feel like I'm forced to evaluate options
solely based on the product packaging and the staggeringly uninformed "blue
shirts" that are there to "help". Phones hardly work in big-box stores
(essentially giant Faraday cages) so I can't use a smartphone to compare while
I shop.

This is very disappointing after the experience of online shopping.

If they want me to buy, then they should help me make a decision, and that
means making it easy to compare ratings and reviews from the web. Show reviews
up front. Put an honest summary of product ratings on the shelf. Don't pretend
like everything you sell is great. The reason I buy online is because I can
make a relaxed and informed decision. If you enable that in a store then I can
both handle the product _and_ make a decision. That's when I am most likely to
buy.

Also, I am _personally offended_ when electronics stores try to sell me
extremely marked-up accessories like HDMI cables. I would spend $10 in a store
if it cost $5 online. But I will not spend $40 or $80, because I know better,
and when you only give me terrible rip-off options then I can infer that _you
don't respect me, my money, or my intelligence_.

------
oh_sigh
What about Amazon showrooming? How many people go onto amazon to read the
customer reviews for a product, and then go out to a local store to pick it up
right away?

------
datasage
This has been happening for awhile. Although smart phones certainly do make it
easier for more people to do it.

I think retailers can combat that in a few ways, but its effectiveness will
vary by industry.

1\. Have amazing customer service. Sales people who know and understand the
products and not push a bunch of useless extras. People still like to buy from
people, not robots (includes brain dead sales people)

2\. Carry mostly only store brand merchandise (See furniture stores like Crate
& Barrel or West Elm). If you want a particular product, you have to buy it
from that company, either in store or online.

3\. Carry products from manufacturers with tight price controls (See Apple).
Retailers used to try to get around manufacturer price controls to have a
lower price, but now that might actually work for them.

------
binarymax
Has anyone seen a small independent store that has a way to order from their
own website, in the store? Above the book, have a qr code or url that points
to the item on their site, but they get it in 3-4 days later. 'Buy it now off
the shelf' for a fiver more than that.

~~~
nickbarnwell
A store local to me (Blackbird in Ballard) has a branch in Portland now and
will often requisition items from the other branch for you to try or buy. The
same happens on a larger scale at large department stores such as Barneys,
where SAs will often call around to other branches to see if they have the
particular piece you're looking for in the proper size (the inventory systems
often are slow to update)

------
TamDenholm
I wrote out a big comment with extensive hyperbole comparing the retail
industry to the movie business and their reluctance to give up their old
business model but it got a bit ridiculous. It's not going to get that bad
because there is already a good foothold in online retailing and there isn't
really an existing law they can use (to my knowledge) to leverage lawsuits
onto people.

Still, I don't feel sorry for the businesses getting "showroomed" that's the
point of a free market, if someone does it better, they should get the
business, go and adapt yourself and stop bitching about it.

~~~
Silhouette
_Still, I don't feel sorry for the businesses getting "showroomed" that's the
point of a free market, if someone does it better, they should get the
business,_

The trouble is, the on-line businesses aren't doing it better. In fact, they
aren't doing the hard part at all.

 _go and adapt yourself and stop bitching about it._

Easier said than done, that one.

I think we're going to see shifts in the retail landscape over the next few
years as more and more things are available on-line, because bricks 'n' mortar
stores do have some advantages of their own that no on-line store can ever
fully match:

* You can try out a real, physical product, even examining the exact item you're going to buy if necessary.

* You can take it away with you immediately.

* You can interact with real people face to face for advice or if there are any problems.

There will always be a certain kind of customer who values these things. I
know, because I'm one of them. I don't want to buy a $1,000 monitor and find
it has dead pixels and some legalese small print makes it my fault. I don't
want to buy some jewellery as a gift and then find it doesn't quite match
another item the recipient already has. I don't want to buy a pair of trousers
and find this make uses slightly different sizes to whoever I bought from last
time and the new pair doesn't quite fit. I don't want to buy a gift for a
book-lover and find the cover got torn a bit in the mail. For items like
these, where the exact details and quality matter and it's worth the time to
make a careful purchase, there will always be a market for real stores that
provide good customer service and convenient access.

On the other hand, city centre stores that are staffed by unpleasant teenagers
who think customer service is not shoving you out of the way more than three
times in a visit, which sell commodity junk for cheap prices anyway, and where
you have to queue for half an hour to get to the car park, pay a small fortune
when you get there, queue for another twenty minutes to get to the till in the
store, and then get told that the special offer on the sticker doesn't apply
because it's Wednesday... Well, those stores are toast, and good riddance. If
I want poor quality products, ambiguous pricing, non-existent customer
service, and unreliable support in the event of any problems, at least I can
get that from the comfort of my own home these days.

------
unreal37
There's a shoe store in Canada that impressed me recently called "Call It
Spring". My gf wanted to buy a pair of shoes, but they didn't have her size.
They offered to mail the shoes to her free of charge, and it arrived at our
house within 48 hours. Also, their prices are very reasonable in store, so the
thought of comparison shopping online is hardly a factor.

If a retailer has low prices relative to their competitors, can give you what
you want now, or ship it to you free within 2-3 days if they don't have it,
they are successfully competing against online shopping IMHO.

------
kogir
My worry is that we'll see a proliferation of models like has happened to
mattresses, where each store has their own special line (even if in name
only). If you can't be sure it's really the same, it's much harder to
comparison shop.

We might also see exclusives (time and chain based), and may even see more
vendor showrooms. Sony, Apple, and others successfully operate stores which
give users a chance to try things out in person.

I'm very curious to see how this will play out - or if it will matter at all.

~~~
ugknite
Sony has been closing their stores pretty rapidly :). I think a store still
has value if there is good customer support, like the Apple Genius bar.

~~~
nickbarnwell
More than customer support, it's the entire customer experience.

Apple is also a special case in that they control pricing of their goods with
an iron fist and never allow discounts. The largest reason for "showrooming"
as discussed in the article was the delta in price between a B&M store and
online - with Apple your choice is "$cur and the product now" or "$cur and the
product later"

------
patrickgzill
For myself, I have bought several drives from BestBuy.

Reasons:

\-- I usually need them ASAP, \-- figure they have not been drop-kicked to my
door, and

\-- I was told by a friend of mine that BB pays extra to have better quality
drives (all drive manufacturers use statistical methods to determine the
quality of a batch - the highest quality is sold for more). He is in a
position to know, as he has worked for several large drive makers at a top
level job(though not as high as VP level).

------
ams6110
This is in no way a new phenomenon, it has been happening ever since mail-
order catalogs existed.

I remember hearing about it in the 1980s, then it was quite common for a
person go to e.g. a camera shop and do a lot of comparison shopping and
talking to salespeople, then say "I'll think about it" and go home and order
their choice from Adorama.

Salespeople would feel used, and rightly so I think.

If I go to a retail store to look at an item, and decide I want it, I will buy
it there. That to me is fair compensation to the retailer who has provided me
with value (having the product physically available for my inspection).

------
zschallz
Retailers have the wrong attitude about this. I have come in to stores many
times intending to buy something online and ended up buying it at the store
instead.

Retailers need to find a way to present the product better (live interactive
demos, friendly sales staff), have a better returns policy or servicing (many
offer 30 day phone support now), and they need to convince the consumer they
need this item now, rather than later. (Now vs having it shipped)

All of the complaining about show rooming is distracting retailers from making
the changes necessary to make this actually beneficial for them.

~~~
nmcfarl
This was the main thing I got from this article. When I walk into a store, try
something (expensive) on and leave with a picture it doesn't mean I'm buying
that thing online. It means I'm going to another store down the block -
expensive clothing in particular has to be perfect, not just very good.

Really expensive goods of any kind need to be the best I can get. I'm never
walking into one store, and buying anything that costs more than a couple of
hundred dollars. I'm shopping around. And this happened long before the
Internet.

------
orbitingpluto
I know I'm particularly guilty of this at bookstores selling new programming
books. I use Safari regularly, but it's nice to find new titles and flip
through the books quickly.

However I end up cross-buying - usually gifts for other people bought at the
last minute where shipping isn't an option.

------
tomjen3
No. At most they may force the big chains to give up physical stores, but
honestly I can't see why I should pay more to buy in a physical store -- there
is relatively little benefit to it.

------
Confusion
I've been predicting for years that stores like amazon will start opening
showrooms at some point. They'll do that as soon as you can't get a proper
look at the real merchandise in other stores anymore. This will happen, unless
technology advances so fast that you can get the full 3D, highres view of the
product in the digital store. I do not yet see that happen.

~~~
TwiztidK
The problem is that as soon as Amazon starts gaining brick and mortar
infrastructure in more states they'll have to start charging sales tax in
those states and they'll lose some of their price advantage.

~~~
Evbn
And so they will form separate companies that sign contracts with Amazon.

------
ktizo
How on earth can this be presented as a new phenomena? Surely this has been
going on as long as mail-order catalogues have been around.

If you are running a bricks and mortar business you have never been able to
compete on price. You have to compete on service. Talk to the people taking
photographs, be welcoming to them. Tell them about your returns policies,
offer onsite expertise, advise them on where to find cheaper items online and
then point out that they pay more from you because they can inspect and test
the exact item they are buying before purchase so that they know they are not
buying a dud. And the excellent after sales support you offer, in person, in a
nice environment. Get involved in your customers purchases. Ask them why they
are buying that and what they are using it for, then tell them what they could
buy that would be better, based on your professional experience. And don't be
scared to recommend a cheaper option from your stock if it is more suitable
for them, as this will bring customers back time and again.

Whatever you do, do not get pissy with the browsers. It will not end well.

------
planetguy
I rarely buy stuff online, but I do worry about what happens to retail areas
as shopping continues to move online. There's nothing more depressing than one
of those run-down unrenovated malls that nobody bothers to visit any more,
half empty and half filled with shops selling china statues of dogs. Now
imagine a world where even the nice malls look like that.

I'm probably over-extrapolating, of course. The reason I hardly ever buy
online is that if I've already decided I want something then I'm willing to
throw in a few extra dollars to get it now rather than later. I can't be the
only one who feels that way. There are some things which will continue to be
much easier to buy instore than online.

~~~
wangarific
I think that happens a lot with smaller purchases, like a pair of cheap
headphones or something like that. With larger dollar purchases, after you
factor in the price difference and taxes (assuming free shipping), the price
difference can be significant.

That said, you have some big box stores flourishing, like Costco - why does
Costco thrive while Best Buy struggles? I think it's the experience at the
store, history with the store, and general approach.

~~~
prodigal_erik
The way I heard it, Costco basically breaks even on the merchandise, and it's
the annual membership fee that keeps the lights on. So they're well-situated
to be a subscription showroom service for their members, with or without
fulfilling many orders on the spot. It probably helps that their staff are
treated pretty decently by retailer standards.

------
franzus
> Then, one by one, the stores that have unwillingly become showrooms for the
> online merchants will fold up. And the American downtown-and-mall landscape
> will begin to look barren.

I don't think that's a problem. It's evolution. Like no one today misses spice
and salt caravans traveling the silk road not many people will miss brick and
mortar shops in the future.

------
studio625
"No." - Betteridge.

------
k3liutZu
I read "shrooming"

