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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.'"
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.
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.
At least they're not trying to legislate their way out of it.
Don't bother adding *real* value, just make it harder for the consumer in the long run. This will end well.
I always thought they were too upscale for close-out shoppers like me.
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.
"Don't Follow Leaders." Bob Dylan
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.
--
"It is now safe to switch off your computer."
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.
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.
Table-ized A.I.
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.
Give me Classic Slashdot or give me death!
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.
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.
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.
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.
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.
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.
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.
Prove anything by multiplying Huge Number times Tiny Number
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.
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.
There's no -1 for "I don't get it."
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.
I don't respond to AC's.
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?
You're just jealous 'cuz the voices talk to *me*
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.
Advice: on VPS providers
So much cheaper than Kroger/Ralph's; an $80 bill at Ralph's is literally $50 at a TJs.
Don't blame me, I voted for Baltar.