Wednesday, June 27, 2012

Showrooming: How to Compete and Win in the New World.

Showrooming is the latest in what appears to be a never-ending series of paradigm shifts for retailers. This is the relatively new activity where shoppers visit a brick-and-mortar store, look at a product, and buy it online. Best Buy is possibly the hardest-hit; it’s been slapped with the unfortunate moniker “Amazon Showroom,” which describes just how widespread this phenomenon has become. 

Product price is the obvious problem — the price difference between Amazon and a big box store hovers in the range of 10%. Most states don’t charge sales taxes for online sales (yet), but even where taxes are collected there is a significant difference in price paid. Add free shipping into the mix, and the customer shift from buying locally to “just looking” locally seems like a logical response. 

1 comment:

Anonymous said...

Retailers like Best Buy need to offer customers new kinds of relationships. That would be a big effort but they could reclaim local customers from Amazon. See here: reinventbestbuy.com