September 11, 2013
Why Does Target Love Showrooming?
There’s no doubt that Target takes showrooming seriously.
Back in January 2012, the chain’s management sent a letter to suppliers asking them to work with the retailer to create exclusive items that couldn’t be directly compared by price.
This past January, the retailer announced it would price match against competitors, including Amazon.com, all year round.
While some of chain’s past efforts could be seen as defensive, an article written by Casey Carl, president of multichannel at Target, on A Bullseye View, gives the clear impression the company sees opportunities to take it to the competition and showrooming is key.
Mr. Carl described showrooming as "the greatest opportunity for retailers" and stressed the need for companies such as Target "play to our strengths and seize the upper hand by enhancing both our physical stores and digital channels."
Mobile is high on Mr. Carl’s priority list. He cited Deloitte research that showed the buying power of smartphone owners who use their devices while shopping in stores.
He also wrote Target was intent on "seamlessly integrating the physical and digital worlds—from products to price matching to personalized offers—to exponentially improve the guest experience." He pointed to steps such as making free WiFi available in stores and the company’s Cartwheel savings program as examples of steps it has taken to integrate the physical and digital.
Mr. Carl acknowledged Target was still in the early stages of its work, but that it was continually focused on testing new concepts including a store and online initiative called "Baby 360."
Because new moms spend more time researching purchases online than the general population, Target has partnered with BabyCenter, a parenting resource, to provide its customers with "content, product reviews and recommendations" on its website and through its mobile app.
Target is also testing redesigned baby departments in stores in Chicagoland. The areas have products on display for consumers to interact with and there’s a "Baby Advisor" service desk to help Target’s guests get answers to their questions.
BrainTrust
Recent Discussions
Discussion Questions
Do you agree with Casey Carl on the showrooming opportunity for retailers? Is Target taking the right steps to capture the opportunity? Are their others that Target could learn from in this regard?
Poll
Seriously, what other options does Target have?
Personal shopper? No. Retail sales training? No. Adding additional employees on the floor? No. Adding more ways to save money will push margins down if widely adopted. Adding a one person service desk passively waits for customers to ask about the merch. Smaller stores will see this and enhance their customer experience.
To look at “showrooming” as an opportunity instead of a threat, retailers need to think about it beyond the simple issue of price-matching for customers using their smartphones. The bigger issue is how to engage those customers using their smartphones as a shopping tool. Yes, price competition is an element that retailers need to manage…but they can also use WiFi and other technology to provide special offers, keep the customer in the store longer and otherwise make the brick-and-mortar experience more engaging.
Yes, I agree with Carl and I think his plans for Target can be effective if properly implemented. It is smart to think about Target shoppers that are spending the most time researching products online, such as new moms in this case. It’s also smart to be proactive and provide free in-store Wi-Fi. You know shoppers are going to be researching products and comparing prices using their smartphones and tablets, so you might as well keep them in your store while they’re doing it!
Showrooming is not going to go away, so retailers need to embrace it. Making stores feel more welcoming, offering exclusive merchandise, providing great customer service and minimizing out of stocks all contribute to a great customer experience. Target seems to be tackling a few of these areas.
That said, Target’s customer service is often lacking and they are plagued by out of stock problems.
Retailers should learn from Target’s innovation and from its mistakes.
To me showrooming is for high-ticket items. However, for things you want right now, showrooming isn’t so important. It gets people in the store and gets them to make more visits. Just like putting in grocery. While Target still hasn’t figured out grocery and the consumer is still learning it sells groceries, it brings people in. While they are comparing the price of a widescreen TV, they might as well buy some things they need right now. Target has found a nice niche. While $100 million per year stores are commonplace among Walmart, they are few and far between for Target. Still a lot of upside for Target.
Showrooming is good for retail if you want customers in your store! Once you have them in the store, it is up to the retailer to engage them and convert it to sales.
Retailers can do this by providing knowledgeable sales associates who can assist in the buying decision. By definition, customers that are showrooming have already decided to buy something. Now, they are just kicking the tires. They key is engaging them and overcoming objectives whether it is feature/benefit or price.
For Target’s market segment, that is the only way to go. Its customer base is becoming more tech savvy and apt to use Amazon.com and other online stores. If it doesn’t offer differentiated products, it will get put on the bottom of the shopping destination list. Give props to Target on recognizing it early and experimenting and innovating out of the situation. Some will work, some won’t, but standing pat will push Target to the curb.
Showrooming has been going on since the second spice merchant brought his wares to the Bazaar in the 1600’s. Even in the modern era, the roads from the Best Buy parking lot to the Walmart parking lot are well worn with “showroomers.”
Half of all Targets “digital showroomers” are on target.com, so when you’re talking about how much business Target is at risk of losing to competitors as a result of in-store digital showroom, you are talking about 0.6 percent of revenue. That’s still a big number, but hardly the biggest peice of revenue at risk for Target.
It’s not a particularly pleasant or easy experience to get out of my home, in my car, through traffic, find a parking spot, and get into that Target store. So, if I’m Target, I love my odds when I get a guest in my store, where I can curate every aspect of their experience.
I want to give those digital showroomers as many reasons as possible to do their digital research while they are standing in my store (vs my competitors stores).
Retailers can look to embrace showrooming by utilising price intelligence tools such as Profitero to understand how they benchmark against Amazon and to offer the most competitive price on the market – turning the threat of showrooming into an opportunity.
As consumers are increasingly driven by price, showrooming is here to stay and retailers therefore need to be increasingly price competitive. Monitoring your online competitors’ prices every day is the most effective way to compete and take advantage of the showrooming phenomenon.
Target is on target for a change. Maybe this time they are ahead of the competition. Showrooming is not going away. As technology continues to improve; it will become more of an asset. Let’s face it; the objective is twofold: to get customers in the stores, whether virtual or B&M; and to get the cash registers ringing.
Abolutely this is the right approach, particularly for Target, but also for any merchant carrying products found in competitor stores. Price matching, while unpleasant, is almost certainly going to be a baseline requirement, with the exception of high service level players with customers who do not utilize the technology. Are these the right steps? This is the Wild West on facilitating in-store customer service via digital as opposed to trying to control it. The reality is that consumers use smartphones in store. They do it whether we give them free WiFi or not, and they will follow the path of least resistance they are aware of to provide the information they’re seeking. We need to facilitate.
When consumers exhibit behaviors that worry retailers, analysis must take place to determine whether the behaviors can be influenced or changed. Not all can.
Showrooming is a by-product of the increasing use of mobile phones by customers as their source of reference while out on the town, and the growing importance of referrals and recommendations from friends and family as an influence on purchase decisions.
Target is wise to embrace the behavior—it is not going to change—and by acknowledging the reality, it has a better chance to increase customer satisfaction while in-store and create the perception that Target is an easy place to shop.
Showrooming is a powerful reminder of the need to ensure selling model relevance, by category by customer. Wexner was right, “Retail is detail.” TGT is aggressively embracing mobile as both coms and commerce channel. As is WMT via Walmart Labs innovations. Continual innovation, or as we like to say “Retail ain’t for sissies.”
Target welcomes showrooming, but then pressures suppliers to create exclusive items that couldn’t be directly compared by price? That is the mattress retailer business model.
It is the right approach to this growing phenomenon. According to an IDC report, showrooming can influence about 0.1-0.3% of 2013 holiday sales, and the impact can only grow, with the increased penetration of smartphones. Treating smartphones as a sales enabler, and launching the category-specific initiatives are the right direction in treating this problem.
More Discussions
Is Meta Committing to Retail via Meta Lab Stores, or Are Other Goals More Important?
Is Meta playing in retail, actually committing to retail, or looking for more data?Aerie Recruits Pamela Anderson To Highlight No-AI Models Promise
American Eagle’s Aerie banner has recruited former “Baywatch” star Pamela Anderson to broadcast the lifestyle brand’s…How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…
Seriously, what other options does Target have?
Personal shopper? No. Retail sales training? No. Adding additional employees on the floor? No. Adding more ways to save money will push margins down if widely adopted. Adding a one person service desk passively waits for customers to ask about the merch. Smaller stores will see this and enhance their customer experience.
To look at “showrooming” as an opportunity instead of a threat, retailers need to think about it beyond the simple issue of price-matching for customers using their smartphones. The bigger issue is how to engage those customers using their smartphones as a shopping tool. Yes, price competition is an element that retailers need to manage…but they can also use WiFi and other technology to provide special offers, keep the customer in the store longer and otherwise make the brick-and-mortar experience more engaging.
Yes, I agree with Carl and I think his plans for Target can be effective if properly implemented. It is smart to think about Target shoppers that are spending the most time researching products online, such as new moms in this case. It’s also smart to be proactive and provide free in-store Wi-Fi. You know shoppers are going to be researching products and comparing prices using their smartphones and tablets, so you might as well keep them in your store while they’re doing it!
Showrooming is not going to go away, so retailers need to embrace it. Making stores feel more welcoming, offering exclusive merchandise, providing great customer service and minimizing out of stocks all contribute to a great customer experience. Target seems to be tackling a few of these areas.
That said, Target’s customer service is often lacking and they are plagued by out of stock problems.
Retailers should learn from Target’s innovation and from its mistakes.
To me showrooming is for high-ticket items. However, for things you want right now, showrooming isn’t so important. It gets people in the store and gets them to make more visits. Just like putting in grocery. While Target still hasn’t figured out grocery and the consumer is still learning it sells groceries, it brings people in. While they are comparing the price of a widescreen TV, they might as well buy some things they need right now. Target has found a nice niche. While $100 million per year stores are commonplace among Walmart, they are few and far between for Target. Still a lot of upside for Target.
Showrooming is good for retail if you want customers in your store! Once you have them in the store, it is up to the retailer to engage them and convert it to sales.
Retailers can do this by providing knowledgeable sales associates who can assist in the buying decision. By definition, customers that are showrooming have already decided to buy something. Now, they are just kicking the tires. They key is engaging them and overcoming objectives whether it is feature/benefit or price.
For Target’s market segment, that is the only way to go. Its customer base is becoming more tech savvy and apt to use Amazon.com and other online stores. If it doesn’t offer differentiated products, it will get put on the bottom of the shopping destination list. Give props to Target on recognizing it early and experimenting and innovating out of the situation. Some will work, some won’t, but standing pat will push Target to the curb.
Showrooming has been going on since the second spice merchant brought his wares to the Bazaar in the 1600’s. Even in the modern era, the roads from the Best Buy parking lot to the Walmart parking lot are well worn with “showroomers.”
Half of all Targets “digital showroomers” are on target.com, so when you’re talking about how much business Target is at risk of losing to competitors as a result of in-store digital showroom, you are talking about 0.6 percent of revenue. That’s still a big number, but hardly the biggest peice of revenue at risk for Target.
It’s not a particularly pleasant or easy experience to get out of my home, in my car, through traffic, find a parking spot, and get into that Target store. So, if I’m Target, I love my odds when I get a guest in my store, where I can curate every aspect of their experience.
I want to give those digital showroomers as many reasons as possible to do their digital research while they are standing in my store (vs my competitors stores).
Retailers can look to embrace showrooming by utilising price intelligence tools such as Profitero to understand how they benchmark against Amazon and to offer the most competitive price on the market – turning the threat of showrooming into an opportunity.
As consumers are increasingly driven by price, showrooming is here to stay and retailers therefore need to be increasingly price competitive. Monitoring your online competitors’ prices every day is the most effective way to compete and take advantage of the showrooming phenomenon.
Target is on target for a change. Maybe this time they are ahead of the competition. Showrooming is not going away. As technology continues to improve; it will become more of an asset. Let’s face it; the objective is twofold: to get customers in the stores, whether virtual or B&M; and to get the cash registers ringing.
Abolutely this is the right approach, particularly for Target, but also for any merchant carrying products found in competitor stores. Price matching, while unpleasant, is almost certainly going to be a baseline requirement, with the exception of high service level players with customers who do not utilize the technology. Are these the right steps? This is the Wild West on facilitating in-store customer service via digital as opposed to trying to control it. The reality is that consumers use smartphones in store. They do it whether we give them free WiFi or not, and they will follow the path of least resistance they are aware of to provide the information they’re seeking. We need to facilitate.
When consumers exhibit behaviors that worry retailers, analysis must take place to determine whether the behaviors can be influenced or changed. Not all can.
Showrooming is a by-product of the increasing use of mobile phones by customers as their source of reference while out on the town, and the growing importance of referrals and recommendations from friends and family as an influence on purchase decisions.
Target is wise to embrace the behavior—it is not going to change—and by acknowledging the reality, it has a better chance to increase customer satisfaction while in-store and create the perception that Target is an easy place to shop.
Showrooming is a powerful reminder of the need to ensure selling model relevance, by category by customer. Wexner was right, “Retail is detail.” TGT is aggressively embracing mobile as both coms and commerce channel. As is WMT via Walmart Labs innovations. Continual innovation, or as we like to say “Retail ain’t for sissies.”
Target welcomes showrooming, but then pressures suppliers to create exclusive items that couldn’t be directly compared by price? That is the mattress retailer business model.
It is the right approach to this growing phenomenon. According to an IDC report, showrooming can influence about 0.1-0.3% of 2013 holiday sales, and the impact can only grow, with the increased penetration of smartphones. Treating smartphones as a sales enabler, and launching the category-specific initiatives are the right direction in treating this problem.