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

So just like the old Sears crap?

[Anonymous Coward]

This will work for a few weeks before people simply look up the equivalent part numbers. Sears tried this already. It sucked, made headaches, and didn't help the problem at all.

Re:So just like the old Sears crap?

[ackthpt]

This will work for a few weeks before people simply look up the equivalent part numbers. Sears tried this already. It sucked, made headaches, and didn't help the problem at all.

This was once the way Montgomery Ward, Sears, J.C. Penney and other stores operated. There were certain products you could only get with their brand name on it. Sure, other stores would have something similar but you went on the quality reputation of the store you saw it in. Also gives them a bit of a leg up against copy-cats.

Down-side and reality-check: Most stuff is being made in China, Thailand, Vietname, Bangladesh, etc. so they're passing the 'savings' on to the buyer and the consumer as well, by selling to all comers, rather than just one chain of stores. Further, China has a rotten track-record of selling stuff out the back door - contract with a Chinese mill for 100,000 fuzzy pink sweaters and you can bet, once they've finished your order, since they're tooled up for this model, they'll be dumping another 50,000 out the back door to whoever wants to buy them, no questions asked.

Best of luck to them with that.

Re:So just like the old Sears crap?

[hairyfeet]

And the "store brands" will be shite on a crusty roll. look at the Best Buy "exclusive" computers, they are the lowest POS garbage that any OEM can scrape together, every part of them is crap from the caps to the plastic. it won't take long for people to realize the ones that can "only be found here" will be the junk piles, like those BB and Staples "exclusive" laptops where they stick some desktop CPU like a bottom of the line Celeron or Pentium in a cheap laptop and pass it off as a good deal.

The best way is to not try to make funky store brands but to simply offer incentives to buy. When my oldest needed a laptop right that minute for class after the old Dell gave up the ghost he went to two local stores, the Staples and Best buy. The Staples were doing nothing but bait and switch, every model he would look at on the floor was magically out of stock but they could get him 'something similar' for a $300 markup, instead we went to the local BB and when they saw he was comparing prices the floor guy said "I'll throw in a bookbag and cleaning kit" and sealed the deal. Later when we checked online they sold it to him within $40 of the average price and the bookbag made up for the difference so we were happy.

So you can still make the sale in retail, simply offer the customer a good deal. I went amazon for my netbook, not because i had something against the local shops, but all they had were Atom crap and i wanted an AMD, now i go into the local shops like Walmart and best buy and i see they have quite a lot of nice AMD Fusion based so if i needed another one I could be tempted if they throw in a little swag or offer a decent price. The local staples still sucks though, last time I went in there with a customer who wanted me there to help decide on some monitors for his business what did i see? same old bait and switch BS. I got so disgusted that even though the BB is 35 miles away i said 'Hop in my truck and we'll get you some monitors". treat the customer right they'll buy, try to screw 'em and watch those sales walk out the door, its really that simple. that customer spent nearly a grand on monitors that day and those sales COULD have been Staples if they wouldn't have tried to screw him. I can't bitch too much about their douchebag tactics though, the customer was so impressed i was trying to keep him from getting ripped off he bought an extra 22 inch and handed it to me for my trouble as well as threw $2000 worth of business my way building the machines for his office. So I guess i should thank Staples for being douches, it certainly made me look better by comparison.

Re:So just like the old Sears crap?

[PeanutButterBreath]

The best way is to not try to make funky store brands but to simply offer incentives to buy. When my oldest needed a laptop right that minute for class after the old Dell gave up the ghost he went to two local stores, the Staples and Best buy. The Staples were doing nothing but bait and switch, every model he would look at on the floor was magically out of stock but they could get him 'something similar' for a $300 markup, instead we went to the local BB and when they saw he was comparing prices the floor guy said "I'll throw in a bookbag and cleaning kit" and sealed the deal. Later when we checked online they sold it to him within $40 of the average price and the bookbag made up for the difference so we were happy.

So in order to make the sale they had to match the on-line price while paying for all the overhead required to meet your "right that minute for class" criteria. How do you expect this to be sustainable?

Or, lets suppose it is sustainable. Why do you tolerate on-line retailers charging the same price while offering less service?

Re:So just like the old Sears crap?

[PRMan]

Maybe they could sell American-made products.

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.

Re:So just like the old Sears crap?

[mug funky]

it's quite telling that this was modded "funny"...

unfortunately the skillbase is rapidly ensuring that local made stuff will have less quality and higher price than the "cheap and nasty" Chinese counterparts.

it's a race to the bottom, and in most sectors, the bottom has been hit.

now that manufacturing is all but dead, and the internet has made retail all but dead, what will everybody do now they've been obsoleted? they can't work a factory, they can't work retail, they can't afford to live without a job.

well done, western world. we've all fucked ourselves.

Re:So just like the old Sears crap?

[PeanutButterBreath]

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.

Right. As opposed to Amazon who offered nothing to make the sale at the same effective price and couldn't even meet the "same day" requirement. Yet, Amazon is somehow viewed as the gold-standard of value for the price-conscious customer.

My point is that either BB's model is unsustainable under your demands (i.e. forced to compete at prices that won't support their operating costs) or Amazon's prices are inflated (i.e. they are charging what it would cost to provide a local brick-n-mortar store service/support and pocketing the difference). Okay, maybe its a combination of the two.

Re:So just like the old Sears crap?

[icebraining]

now that manufacturing is all but dead

It is?

According to United Nations data, the U.S. is still the largest manufacturing country in the world. In 2009, American manufacturing output (in real terms) was nearly $2.2 trillion. That's about 45% larger than China's, at just under $1.5 trillion.

Can China compete with American manufacturing

Re:So just like the old Sears crap?

[mug funky]

from the quoted article:
"(For statistical reasons, I chose to use figures that include mining and utilities as part of manufacturing.)"

i'd like to know those statistical reasons.

Re:So just like the old Sears crap?

[artor3]

A more accurate statement is "manufacturing jobs are all but dead". The US's real manufacturing output (in inflation adjusted dollars) has doubled over the past thirty years, and aside from a temporary dip during the recession has been steadily rising. But the number of people employed in manufacturing has fallen by ~30% over the same period... and that's without accounting for the population increase!

The problem with the "decline" of manufacturing is that American workers are crazy productive. We can produce all that we need with far less than full employment. This should be a good thing, but because of our idiotic love affair with the failed "trickle down" theory of economics, we end up punishing millions of people, not because they're unwilling to work, but because we simply don't need them to.

If we could get over our fear that someone might get something for nothing, we could simply start giving everyone enough money to get by, with jobs being something people do to get ahead, not to survive. If we don't do it soon, increasing automation will force the issue within a few decades.

Re:So just like the old Sears crap?

[SkimTony]

I think you're looking for this shirt:

http://www.despair.com/madeinusa.html

Re:So just like the old Sears crap?

[tlhIngan]

The problem with the "decline" of manufacturing is that American workers are crazy productive. We can produce all that we need with far less than full employment. This should be a good thing, but because of our idiotic love affair with the failed "trickle down" theory of economics, we end up punishing millions of people, not because they're unwilling to work, but because we simply don't need them to.

Well, the reason for that is because the American worker is EXPENSIVE. So if you're manufacturing in the US, you want to minimize your labour costs. So what you do is automate the hell out of your production line - design for manufacturing. You redesign parts so they can be put together with robots, you redesign circuitboards so there's fewer of them and fewer fussy connectors that have to be hand-inserted and hand-closed, etc.

So the average American worker is damn productive because robots are doing 99% of the work, while he's doing the 1% that couldn't be automated reliably.

Contrast this with China, where automation is very few (labour is cheaper than automation) so the only thing keeping you from making lots of fussy parts is it takes longer to build (== costs more people and takes longer to assemble). Speeding up your testing by 1 minute can save a ton of money in China as that worker saves 1 minute per device they test. For a robot, it doesn't matter too much.

China's at the "labour intensive" part of industrialization - where goods require lots of manpower to manufacture. The US is at the "capital intensive" part of industrialization, where goods don't require much manpower, just a lot of seed money (robots are expensive, upfront designing for robots is more expensive in time and money, etc), but manufacturing requires very few people and is highly automated.

Of course, Steve Jobs was also wrong in that you don't need 30,000 factory workers to make your product because you'd only need 1/10th of that or less as robots are doing all the work of the 30,000, and the fewer Americans are just overseeing the production line and minor assembly.

Of course, the Chinese model is a bit more nimble in that a design change means re-teaching 30,000 people and a day to get back to full production. Reprogramming all the robots with the updated design and steps takes far longer (both in updating the designs and roles of each robot, and training each robot in its new role and then testing the final result), but with enough technicians (bit pricey) it can be done relatively quickly.

Re:So just like the old Sears crap?

[pthisis]

That's a good thing. The problem is that Americans are conditioned to think manufacturing jobs = good, service jobs = bad. In reality that's not the case; pure manufacturing are the most brainless, automatable jobs ever. It would make zero sense to keep paying a person to use a pair of scissors to mow the lawn when you've invented the lawnmower, and likewise it makes no sense today to pay someone to put screws into the car frame when that's trivial to automate

Yet we mourn the loss of manufacturing jobs--truly the shittiest and easiest to replace jobs out there. That''s mainly because of a historic stigma where all of the good service jobs get relabelled to something else.

When it comes down to what you're actually doing, being a doctor, lawyer, engineer, or computer programmer are in actuality service jobs. So is being an artist or home designer or anything else where you're tailoring your service to the customer's needs. The burger industry paper hat stigma has made those jobs lobby to be called "professional" (as though manufacturing jobs or working the line at McDonalds somehow are amateur) or similar.

But as the century progresses, it's the service jobs that are going to be the ones people want to have, and the loss of today's manufacturing jobs will eventually be viewed as just as good as losing all the coal-shoveling, cotton-picking, textile mill-working shitty jobs that machines replaced 100 years ago is today.

I do the opposite

[Anonymous Coward]

I do the opposite of what this article suggests. I'll look up reviews or whatever online, and instead of waiting around for shipping I go out and buy it. I've even done this with Target.

If they stop carrying these products, then I will never be buying from them, since they'll have nothing I want to buy.

Re:I do the opposite

[zAPPzAPP]

Every time I try to do this, the first 3-4 shops I visit don't have the item in stock.
And of course none of them offers a list of their items online.

Re:I do the opposite

[firex726]

Just lookup the item # online and call ahead to the store. If they have it ask them to hold onto it upfront and head over. If they don't, find another location/store.

Re:I do the opposite

[rec9140]

"Just lookup the item # online and call ahead to the store. If they have it as"

Whoosssssshhhhhhh!

The whole point is NOT to use the phone! Point click go pick up. Seriously the level of stock intergration systems in the 21st century utterly sucks!

X store should be able to ACCURATELY tell me that widget 12345 is in stock in store 788 with 32 and its accurrate when I pulled it.

I've seen this all to often from all sorts of stores offering pick it up now services...

Then ... how can it be in stock in the store and be out of stock online? ? ? HMMM??? IT CAN NOT!

The store should shove it in a box and UPS/USPS it to me! If the warehouse is out of stock and stock is in the store(s) then ship it to me! GO FETCH TIME! Hence why accurate stock systems need to be in place, and I seriously find it out of place that in 2012 this is not the norm.

Re:I do the opposite

[djdanlib]

As someone who worked in retail for 8 years, I agree with this. Retail employees would MUCH rather you called ahead. They will even call other stores to find it for you, if you ask. Otherwise, you'll show up and get angry with them, and their job sucks enough already. So yes, please do call ahead if you know exactly what you want. Press the 7 or 11 digits on your phone, it's not hard!

Re:I do the opposite

[Anne_Nonymous]

Just as a warning, it turns out that Home Depot will not hold your caulk up front for any length of time.

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:I do the opposite

[Grishnakh]

It depends on what you're getting. If you're buying milk, bread, and a bunch other low-value/high-volume groceries (i.e. it would cost a lot to ship $100-200 worth of groceries by Fedex), then Amazon really isn't a realistic choice, and Target makes it pretty easy by having everything in one place. For high-value items, it's totally different.

Also, clothes are generally better bought locally, since you can try them on before buying them. Sure, some online places let you return clothes easily, but that gets expensive with shipping charges, plus prices online seem to be very high for clothes, whereas it's easy to find stuff on clearance (for 50-90% off) at local stores.

Re:I do the opposite

[djdanlib]

They will have to go looking for it either way, except this way they have fewer angry customers. It's a good scenario.

Angry customers don't tend to come back, and they spread the word about their anger. That means even fewer customers, which means fewer dollars going to the store, which means lower ratings of the store inside the company, which means they allocate fewer employees. Retail workers should be good with that idea.

Re:I do the opposite

[BonemanPgh]

Before buying a Kindle I actually wanted to use one to decide on the Touch, Keyboard, or Standard edition. Buying via Amazon has a 30 day return policy, free shipping both ways so it would be zero risk to buy one through them. Every retailer has the same exact price on them. Disclaimer - I worked in retail sales at a place very much like Best Buy 20 years ago. I started out at Best Buy, units were on a ultra-sensitive anti-theft cable that triggered three times while I was looking. All units on a demo loop which was worthless for evaluating the normal tasks I'd do with the thing. Best Buy has a 15 day return policy, they will not match Amazon's, even if I purchased their extended warranty. I went to Target, units also on demo loop, sales staff that was helpful, courteous, and knowledgeable. Their return policy - exchange only 30 days, no exceptions. I think they also offered some extended warranty that didn't include damage. Next was Staples. Same demo loop, extended warranty available, hard to figure out from the brochures what the policies were. Group of employees talking to each other 10 feet from me, no offers of help. I couldn't be bothered to spend my money there. I had to drive past an HH Gregg and figured I'd see what they had while I was at it. Helpful employee, a unit that was not on a demo loop, 30 day return for refund policy, reasonable price on an extra warranty that covers accidental damage. I bought it from them immediately. At each store (Staples excepted) I asked to try the unit outside of demo mode and they could not or would not. I also asked "Why should I buy this from you instead of Amazon?" The ONLY store that had a value proposition same or better than Amazon was HH Gregg, and their poor employee could not give me a single reason why I should buy it from him. I had to drag it out of him. The brick and mortars need to focus on providing a better overall value, and that includes their employees being able to enumerate exactly WHAT that better value is.

Well, good for them

[Anonymous Coward]

At least they're not trying to legislate their way out of it.

Re:Well, good for them

[Mr. Foogle]

Sure as a dog returns to it's vomit, that will happen. About 2 seconds after they figure out this isn't working for them.

Right....

[_LORAX_]

Don't bother adding *real* value, just make it harder for the consumer in the long run. This will end well.

Re:Right....

[vux984]

Don't bother adding *real* value

I'm curious what "real value" you suggest they add?

The local bookstore has a coffee shop, lets you preview the books in comfy chairs, has kiosks to let you see what's in stock and where in the store it is, a whole bunch of staff, a club/rewards card...

And its pretty busy too.

But half the people i know, walk in browse around, look it up on amazon on their smart phone, and if they can get it a dollar cheaper online will walk out without making a book purchase.

I think they've realistically done everything they can, short of simply matching amazon's prices. But that's not a value add, and a race to the bottom is a losing proposition for the retail world... amazon can lower prices more than a store in can. So they'll be out of business before they can win.

Re:Right....

[Grishnakh]

Trying how? What extra features are they going to slap onto a HDTV made in China that aren't already on other models available everywhere else? That's my point: you're not going to get truly exclusive products when you just buy them from China like all your competitors.

Their attempts will be just like all the "exclusive" products people here have already mentioned: slightly different SKUs (12345T instead of 12345) so they don't have to price-match and it's harder to compare with online prices, slightly different model numbers with no real differences, etc. Other retailers have been doing this stuff for ages. Someone even posted a link to an Atari 2600 that Sears rebranded way back in the early 80s.

Re:Right....

[MikeMo]

Actually, that's just the opinions of slash readers. Target explicitly said they wanted unique, special products that made them stand out from the commodity market. Failing that, they want their vendors to give them prices which allow them to compete with the online stores. Check out TFA, it is very informative.

wait, Tar-jay is low-end?

[Anonymous Coward]

I always thought they were too upscale for close-out shoppers like me.

The problem with this is

[jodo]

The problem with Target-exclusive products is there will be no way to read reviews as there will be essentially none online. And I don't buy anything of substance without researching it.

ie, the mattress model

[TheGratefulNet]

anyone who has shopped for a mattress in the US knows that the brands have all colluded (the S-brands; funny how the 'sleep' companies insist their names also start with an S) to change their model names from store to store!

some stores are willing to help you decode the names into equivalent model names in their stores; but usually its a fixed game against you, the consumer.

so, target and others want to play the mattress game?

you know, when you declare war on your own customers, it may backfire. just saying...

get wise, retailers. don't pull this shit, please! decades of this mattress syndrome has made mattress shopping as frustrating as used car shopping, and about as unpleasant. you want that image stuck to YOUR products and 'show rooms'?

re-think this, guys. I'm pretty sure you don't really want what this will get you.

Is this realyl new in your part of the world?

[asdf7890]

This has been done in the UK for some time, though for slightly different reasons. Having exactly the same product aside from it having a different model name/number used to be something a couple of camera manufacturers used to do for Dixons/Currys/PCWorld. It meant that price-match offers could be very generous (Found it cheaper elsewhere? We'll refund three times the difference!), because they would never need to pay out as no one else carried that exact model (well, they did, but with a different label) except those three stores which always had it at the same price as they are all owned by the same parent group.

Luddites

[Tablizer]

Instead of fight against "lookers", embrace them. Who cares how the sale is made: if having a store improves online sales, that's a good thing. And, have the stores shift into a service center instead of just a physical catalog. A physical presence to demonstrate features first-hand and help trouble-shoot on-the-spot is sorely lacking online.

Change with the times, guys. Sure, you'll have to shuffle around your business model a bit, but the sooner you embrace the new model instead of fight it, the better.

Re:Luddites

[avandesande]

I would think that their worst nightmare is nobody coming to their store at all. Consumers are an impulsive bunch and I think the group of people that are willing to wait a week(s) and deal with package delivery to save sales tax is actually pretty small- and then what about impulse buys of other items they see in the store?

I call bull on this one.

Re:Luddites

[Bucky24]

So are you willing to pay an admission fee to Best Buy, or should these "services" be offered for free too?

Works for Costco, doesn't it?

Reviews

[Hatta]

If I can't find any reviews for products on independent sites, I won't buy them. So if Target only carries custom products, I'm a lot less likely to find a review for that product. That means I won't be shopping at Target.

At this point, the only reason for B&M stores to exist is for time critical situations when you can't wait a day or two to get your item off the internet. There's no way they're going to be able to compete with the internet on price. Compete on convenience and charge for it. Yes, it will be a smaller market, but that's progress.

Costco is ahead of the curve on this

[jmichaelg]

Costco already beats online retailers with three strategies:

1) It sells extras with the package that are not included with the regular offering. My roomba came with extra room markers and extra filters.
2) When the first two roombas I purchased crapped out, Costco exchanged them no questions asked. I had to try three units before I got one that worked reliably. Had I bought from Amazon, I would have had to pay to return the units and that's assuming they would have accepted them back.
3) Costco prices goods very aggressively.so they're usually around the same price as what's offered online.

I buy less and less because of this kind of BS

[PeanutButterBreath]

Way too much effort involved in sorting through all the buying options. E.g. I would use a new digital camera, but I can't be bothered sorting through a zillion camera models and retailers. I still have a decrepit dumb phone for the same reason.

I don't get any satisfaction from navigating the maze of hassle thrown up by retailers these days.

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.

That's not their worst nightmare

[hawguy]

A retailer's worst nightmare isn't people that come into their stores and comparison shop online while they are surrounded by in-store advertising and are subject to impulse purchases. Their worst nightmare is people like me that usually choose to research and shop online without ever setting foot in the store.

If Target starts selling a bunch of house-brand crap that I can't research online, I'll be even less likely to buy something there. Unless it's cheap stuff like cleaning supplies, but I usually just buy the store brand of stuff like that anyway.

Offer price matching on the spot or throw in more

[VinylRecords]

This really isn't that difficult. If someone is coming into your store and won't buy from you because they can get it elsewhere for cheaper then simply match the price. Either that or throw in some extras like a free upgrade or accessory if they purchase the item in question.

I would always go into Best Buy and look through their enormous DVD library. The shop near me had literally hundreds of foreign films and shows in stock all in region 1 including a gigantic aisle of only anime films and shows. I'd show up, take note of what looked good, and then go online and find them for literally 50-80% off in brand new sealed boxes.

One time I wanted to buy a DVD and said that if they matched the online price of another retailer that I would buy it. They declined and I ended up buying it online later that day.

It's really not that hard for consumers who have a choice. You might occasionally need the convenience of immediate purchase at retail. But most of the time people can wait to order consume electronics or entertainment media. So they'll sacrifice immediacy in order to save money.

Re:Somehow this won't turn out well.

[firex726]

A lot of places that do price matching already do this.

It'll be SKUs #####A, #####B, #####C.

Retailers #1, #2, #3, each get the respective SKU, despite being an identical product. And when you try to price match they won't as it's technically a different item. Of course they leave off how they are the only ones who sell that SKU and thus would price match themselves.

Different SKUs already widely used

[monkeyhybrid]

At least here in the UK, the main PC / electronics retailers already have their own SKUs for essentially the same product available elsewhere. Only last week when browsing netbooks at my local Comet / PC World / Currys, I found several models of interest that I could find no information online for. I got chatting to one of the sales assistants about this and he admitted the main stores all do this now to combat customers going elsewhere. He also said it's very useful for them avoiding having to fulfill their price match guarantees because although the product may be identical elsewhere, it's a different SKU on their books.

Re:babysrus does alread

[cheater512]

Brother printers are similar. Over here in Australia, you can get the HL-2240 but in Office works the exact same printer is the HL-2242.

I think that is to get around the 'we'll beat any other price by 10%' gimmicks though.

Mattress Shopping

[Tokolosh]

This has been going on for years in the mattress industry. Identical products are sold under different labels, with huge markups. So there is an incentive to confound comparison shopping. They don't care about customer satisfaction or loyalty, because a mattress is not a frequent purchase.

Why I never shop retail anymore...

[EmagGeek]

ME: "Hey, do you have an XYZ Widget Plus in stock?"

Them: "No, that's not a normal stock item, but I can order one for you and have it here in a week for $250"

ME: "I can order it from Amazon Prime and have it here TOMORROW for $215, sorry."

The ONLY reason to go into a brick and mortar store is if you absolutely have to have it right now. Brick and Mortar did not adapt to the advent of online shopping. It's their fault. They needed to realize that they could no longer sell commoditized items. They would have to offer some REASON to pay MORE in a store. Without a significant value add, there's no reason to even set foot in a store anymore.

Re:Why I never shop retail anymore...

[jpwilliams]

The ONLY reason to go into a brick and mortar store is if you absolutely have to have it right now.

Big stores like Target, I totally agree. But for lots of specialty items (bikes, quality shoes, quality clothing), a brick-and-mortar can still offer expert assistance to keep customers. Sure, you can buy all those things online, and mine the collective opinions, but a seasoned sales professional can help you pick out what's right for you, not what the masses rank the highest. Unfortunately, I don't see that value-add model working for anything in Target, or even Best Buy, who's sales team, in my opinion, tends to know little about the products they sell.

Yes, but...

[MrEricSir]

Look at Trader Joe's. Sure, you can buy all that stuff elsewhere but it's cheaper because it's a "house brand." If Target can do this, more power to 'em.

This strategy doesn't have to suck as much as the Sears-branded Atari 2600.

Re:Yes, but...

[ackthpt]

Look at Trader Joe's. Sure, you can buy all that stuff elsewhere but it's cheaper because it's a "house brand." If Target can do this, more power to 'em.

This strategy doesn't have to suck as much as the Sears-branded Atari 2600.

Trader Joe's works because they are very focused on the quality of the goods from their suppliers - if the stuff gets too many complaints, it's gone and they look for a new supplier. I must spend half my food money at TJ's simply because the food and produce are always top-notch. If the big supermarket chains had the same attention to detail TJ's had there never would have been a TJ's.

Re:Yes, but...

[im_thatoneguy]

I was in Target yesterday looking for board games and I saw that they had an entire line of exclusive board-game SKUs.

Unlike the standard boxes they were about 25% more but came in wooden boxes instead of cardboard. The target edition appeared to be a premium model.

Seems like a smart move to me. I also bought a Galaxy Tab from Best Buy since they exclusively had the white model. I can say for certain I wouldn't have bought it from Best Buy for any other reason.

In the case of Target I liked the option since they offered an exclusive product. In the case of Best Buy I just hated BB more since they were out of stock of all the accessories, nobody was helpful and the product differentiation was minimal.

So my advice for retailers is to be careful.

Re:No diff

[DogDude]

You don't get it. They don't want your business. That's why they're doing this. They're "firing" their bad customers. Businesses do it all of the time.

try service for a change

[reemul]

I'm with you - the one idea that the big box stores absolutely refuse to contemplate is competing based on _service_ instead of _price_. Most of them already used low prices to kill off the local small stores that provided real service to the shopper and community, now that they're getting creamed by Amazon they suddenly are all about supporting the local store.

You want to be the "local" store, Mr. Big Box Chain? Try some actual service. Stores that make sense, staff that understands the product and wishes to help rather than just upsell warranty packages, "sale" prices that are actually below the normal price that I need less than 2 seconds to find with my phone. Some products I really want to be able to touch and examine with my Mark 1 eyeball, which I just can't do online. Or ask questions in real time, with the product in front of me. Make that happen, make the experience pleasant, and I'll buy from the physical store over the online store if the prices are even close.

Too often I go into a place like Best Buy absolutely intending to buy a specific thing and fail. The stores are laid out to some layout designed to make you walk past as many impulse purchase racks as possible, rather than getting you right to the thing you actually want to buy. The staff isn't judged on whether they are helpful or even friendly - their metrics are all about sales, without teaching them any skills at interaction that might make sales happen. The item might not be in the place it should be, but good luck finding a minion to check the system for where it is, or whether it is out of stock. Forget service, try to go to Best Buy and not get angry.

As long as the brick and mortar guys lose on both sales and service to the online retailers, they're inevitably going to die, unmourned. I acknowledge that they probably can't win on price. How about, just for giggles, trying service, just once?

Re:try service for a change

[ediron2]

Actually, customers largely refuse to buy based on service. Among the service-is-king tier, there's room in the market for Neiman Marcus and... uh... well, that's it. Everyone else that tries, regrets the move. It's like newspapers blocking access to content behind a paywall. Everyone has to try eventually, and each time it fails: consumers race toward the bottom on cost far faster and more forcefully than they pay attention to quality and service. I don't like this, but it's a dominant rule of market economics. Incidentally, the same market economics are behind America's jobs *sprinting* to China. The example I've been watching most recently is the Raspberry Pi team's decision that they can't afford to manufacture in the UK as they'd hoped. Time and costs were too much to overcome.

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.

Partnerships and don't focus on product

[devleopard]

They're not going to stop this. A limited number of products that people comparison shop for can be made in store-specific versions (will there be a Target-only version of Madden?)

Why not embrace it, and partner with Amazon? They could even do a location-based search agreement.

They should push their advantages, which is not the product. They don't make Playstations or hair dryers, so to try to make your product your competitive advantage will always fail. They should push their sales focus to things that can't be comparison shopped easily (clothes, food, low cost items). Emphasize the time element (not a Target item, but I frequently buy computer and technology products at retail that I could easily save money at NewEgg on). Take the emotional approach: Make people feel guilty about not paying sales tax that benefits their state and municipality, and point out that buying local = jobs. Focus on ease of returns, and try to make that process easier. Emphasize services. Tell delivery horror stories. Etc, etc... I'm sure any or all of these can be argued down, but the bottom line is, a brick-and-mortar has competitive advantages, but they're not the product they're reselling, and it's not price.

Re:I really havent figured out "showrooming"

[hairyfeet]

Depends on the product as some stores will really assrape you on price for what should be a common as dirt product. Take 100 packs of blank DVDs, its not like they have an expiration date, DVD burners are as common as dirt and on every new PC and laptop, so WTF? I walk into Wally World and they want $48! I walk into staples and its $46! I can grab the Amazon brand for less than $20 or Verbatim for $25 or so, and frankly i've not had any trouble out of the Amazon store brand.

So at least for certain items I've found the B&M stores aren't even close. thumbsticks, any kind of memory card, blanks, DVD burners, basic bog standard stuff that you wouldn't think they would gouge like a Monster Cable on they very much do. If it was only a couple of bucks more i wouldn't care, taxes or no, but i'm not paying double just to get it now, thanks ever so. Hell the local Walmart wanted $19.99 for a lousy 4Gb thumbstick! Give me a fricking break! That's 4 times the price the same stick is going for on newegg, what are they nuts?

Re:For those with plenty of money to spend?

[iluvcapra]

So much cheaper than Kroger/Ralph's; an $80 bill at Ralph's is literally $50 at a TJs.

Re:For those with plenty of money to spend?

[Dahamma]

No, that's Whole Paycheck^H^H^H^H^H^H^H^H Foods...

Re:Amazon is bad in different ways.

[AngryDeuce]

I have literally never in my life bought one of those "similar products". I don't even look at them...it's pretty much banner blindness to me now.

A brick and mortar store, however, forces me to physically wander multiple aisles I would otherwise not go down, deliberately obfuscates high-demand items by forcing you to search through shit you don't need to find them, and in some cases, even makes it impossible to get a product without dealing with a fucking salesperson who's going to try and sell me a goddamned replacement plan or $200 Monster Cable to go with it whether I want it or not.

Speaking of Best Buy, I've actually had a salesperson ask me if I was going to buy one of those replacement plans, and when I said "Nope" told me he had to get my product out of the back and never returned. I saw him 15 minutes later as I was walking out trying to sell a plan on a $30 printer to some older woman. He was even holding it while he talked to make sure she didn't bail on him. I complained to the manager on duty about how it sure seemed like his employees didn't want to help people not buying service plans and he started trying to talk me into getting one. Never even got an apology (not that I really expected one...it's fucking Best Buy).

Yeah, to hell with that crap...I'll stick with Amazon.