Retail Chains To Strike Back Against Online Vendors

Hugh Pickens writes "Marissa Taylor says the retail chains' worst nightmare are consumers who come in to take a look at merchandise in-store, but use smartphone apps to shop for cheaper prices online. But now stores like low-end retail chain Target plan to fight 'showrooming' by scaling up their business models and asking vendors to create Target-exclusive products that can't be found online. 'The bottom line is that the more commoditized the product is, the more people are going to look for the cheapest price,' says Morningstar analyst Michael Keara. 'If there's a significant price difference [among retailers] and you're using it on a regular basis, you're going to go to Amazon.' Target recently sent an 'urgent' letter to vendors, asking them to 'create special products that would set it apart from competitors.' Target's letter insisted that it would not '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.' Target also announced that it had teamed up with a handful of unique specialty shops that will offer limited edition merchandise on a rotating basis within Target stores in hopes of creating an evolving shopping experience for customers. Target is 'exercising leverage over its vendors to achieve the same pricing that smaller, online-only retailers receive,' says Weinswig. 'This strategy would help Target compete with retailers like Amazon on like-for-like products.'"

Comments

How about having the item in stock?

[Anonymous Coward]

So, let's see...I drive 25 miles (each way) to Best Buy to try out a gizmo. The price at Best Buy is $250, the price at Amazon is $235.

It's not worth $15 to me to wait, especially as I've already committed to drive 50 miles. So I tell the sales droid to grab one for me.

Turns out that they don't actually have it in stock, but offer to order it for in-store pickup next weekend. For $250.

At that point I click the order button at Amazon on my cell phone, and it's at my house in mid-week. For $235.

You lost a sale, Best Buy. This has happened multiple times. Ever since Circuit City went under, Best Buy has down way downhill.

Amazon didn't kill you. You killed yourself.

Does Target intentionally block cell reception?

[afabbro]

There are two Targets near me, and I live in a major US suburban area. Outside either, cell phone reception (Verizon) is excellent. Ten feet inside the store, it drops to one bar and by the time you get very much further, it's NO SERVICE. It is generally impossible to call out or in to a cell phone in Target, or even to send SMS. It has been that way for at least three years, and my wife (who's lived in this part of town longer) says it's been that way as long as she can remember. Other friends say the same thing.

I'm sure Target doesn't have cell phone jammers installed - that would be illegal. But I wonder if they've designed their buildings to be cell-signal-unfriendly? I can imagine it has all sorts of benefits - employees can't covertly text while on duty, and shoppers can't price-compare on the Internet.

I have no proof...just my anecdotal experience.

There is a large Wal-mart supercenter near us, and my Verizon cell works fine throughout, only losing a bar or two in the middle of the store, which is several times the size of Target.

Re:I do the opposite

[AngryDeuce]

Oh, believe me, the internal systems know exactly what they have in inventory, how much is there, and how much they're expecting in future orders.

Target especially, I know this from first hand experience, their internal systems track everything, they have an elaborate warehousing system that is updated constantly by warehouse personnel wielding LRT's (barcode scanners that tie into the inventory system) as they deal with overstock, as well as do replenishment pulls to keep the shelves stocked. You can also see what every store carries via their intranet for stock balancing purposes...they know what's coming on every trailer days before it gets there. It's all barcoded.

It would probably be trivial for them to hook that system into their forward-facing website, but they don't want that. They'd rather you get in the car and drive down to the store and impulse buy a ton of crap you weren't actively looking for. That's pretty much every big-box retailer.

Allowing people to get what they want and get out is the last thing they want, so outright telling you if they have something for sure via the web will likely not happen. Even if you can confirm it is there, good luck getting a hold on it so you can run over and pick it up.

Re:So just like the old Sears crap?

[hairyfeet]

Oh please! Do you HONESTLY think they paid MSRP for either the laptop OR the bookbag? The cleaning kit was MAYBE $2, the bookbag MAYBE $8, and they probably made at least $40 on the laptop. So they made out just fine friend, it was the fact they were willing to offer SOMETHING, even if it was cheap, that helped to make the sale.

And as someone who IS an actual retailer frankly its just good business. I often will pick up cheap keyboard mouse combos for less than $10 when newegg or Tiger is having a sale so when someone is looking at a tower I can say "Hey i'll throw in a new keyboard and optic mouse, no charge" and you'd be surprised how often that works. With laptops i use cheap 4-8Gb thumbsticks or if it has a card reader a cheap SDHC card. Does this hurt my bottom line? hell no, all it means is I'm making $50-$60 on the unit instead of $60-$70, big fricking whoop. but it makes the customer feel special to think they got "something extra" and that good feelings equal more business and they are more likely to send others your way.

Its business 101 guy, you want to build a rapport with the customer and make them feel good about buying from you. Throwing in some cheap swag that we frankly didn't pay hardly anything for doesn't hurt our bottom line while making the customer more likely to give us repeat business and IT WORKS. My oldest has gone back to that same BB and bought a whole bunch of extras for that laptop, like USB speakers and a briefcase for when he doesn't need the bookbag, all kinds of little extras, why? Because they made him feel good about buying from them, that's why. Its such a simple thing and it amazes me so many businesses have forgotten that.

Remember that $2000 sale i posted about earlier? Know how I got that account? The guy came in on a sat and was hurting because he needed to get some bookkeeping done by Mon and his PC crapped out on him. I yanked his drive and slapped it into one of my spares so he could get his data and showed him how to access it and told him "You just use this spare while I get the parts ordered for yours, that way you aren't gonna have any downtime" and that simple little act of making sure he wasn't jammed up not only got me his office, but the print shop down the street, a nice upgrade of the dorm at the local college, and three customers that have been steady buyers for nearly 2 years now, all because of treating one guy right and keeping him from hurting. he quickly spread the word about how well i treated him and the business rolled in. Hell i haven't even had business cards in over a year, I've had too much work to even need the things, and just word of mouth keeps me swamped most weeks. treat the customers right and they'll buy, simple as that.