"Showrooming" Whaddya Think?

[Midpack]

Heard a story this AM about how Best Buy is having trouble turning a profit. I assumed once Circuit City died off, Best Buy would do reasonably well. The journalist said Best Buy (and many other brick-n-mortar retailers) are getting killed by people who go in and scope out products and then go home and buy them online. Though I had not heard the term "showrooming," I knew it went on but I hoped it wasn't too widespread - evidently, and not surprisingly it is.

In response, Best Buy said this morning they will match competitors online prices. That seems unsustainable and it could really hurt a lot of retailers, not just Best Buy by any means.

What do you think of this phenomena?

If you don't want to know what I think before commenting, stop reading and reply (if you like).

I buy lots of things online, but only items that I can research online. If I feel the need to see something in person, compare products first hand, and/or especially to seek the guidance of a store clerk - I have no right to then go buy online. I should be willing to pay some premium for the physical store and the employees. It hasn't helped that state sales taxes are still not collected in many cases. Though shipping is an added cost, for big ticket items shipping is often (much) less than taxes - so the gubmint failure to address interstate sales taxes has actually made online shopping even cheaper in relative terms.

I think we'll be sorry if all or too many brick-n-mortar stores fail. But if Best Buy can't make a buck in consumer electronics, we may be headed that way. I say it all the time, 'we (all) get what we (collectively) deserve.'

[Alan]

Quote:

Originally Posted by Midpack Heard a story this AM about how Best Buy is having trouble turning a profit. I assumed once Circuit City died off, Best Buy would do reasonably well. The journalist said Best Buy (and many other brick-n-mortar retailers) are getting killed by people who go in and scope out products and then go home and buy them online. Though I had not heard the term "showrooming," I knew it went on but I hoped it wasn't too widespread - evidently, and not surprisingly it is. In response, Best Buy said this morning they will match competitors online prices. That seems unsustainable and it could really hurt a lot of retailers, not just Best Buy by any means. What do you think of this phenomena? If you don't want to know what I think before commenting, stop reading and reply (if you like). I buy lots of things online, but only items that I can research online. If I feel the need to see something in person, compare products first hand, and/or especially to seek the guidance of a store clerk - I have no right to then go buy online. I should be willing to pay some premium for the physical store and the employees. It hasn't helped that state sales taxes are still not collected in many cases. Though shipping is an added cost, for big ticket items shipping is often (much) less than taxes - so the gubmint failure to address interstate sales taxes has actually made online shopping even cheaper in relative terms. I think we'll be sorry if all or too many brick-n-mortar stores fail. But if Best Buy can't make a buck in consumer electronics, we may be headed that way. I say it all the time, 'we (all) get what we (collectively) deserve.'

The last thing we bought at a Best Buy store they didn't have the model we wanted in their storeroom - it was a monitor that was on display - and they told us to order it on-line and come back in a few days to pick it up, shipping free, which we did.

[BTravlin]

I too feel obligated to buy at the store if I actually go there to check out the product in person. Sadly, many don't feel that way as price (or lowest cost) almost always seems to be the top consideration.

[Katsmeow]

I guess I have mixed feelings about this.

In general if I, say, go into Best Buy and look at something that I want to eyeball first, I will buy at Best Buy if it is reasonably competitive on price. That is I'll pay a little more because they had it there when I wanted to look. But...I won't pay 30% more or double which is often what the difference is.

The other irritation I've had specifically at Best Buy is going in and finding something more expensive in the store than you can order from Best Buy itself online. I don't know if they still do this, but used to you had to go to a kiosk in the store, order online and then arrange to pick up at the store which was such a PITA that I would just end up going home and ordering from Amazon...

I would also point out that some things I'm perfectly happy to buy sight unseen so I don't "need" to see them in the bricks and mortar store but if I'm at Best Buy or driving by it I might stop in to see what they have. In that situation, I might pay a tiny premium to buy there but not much of a premium.

What I really want is a place to go look at the things that I want to buy online but then not have to pay a huge markup to do it. I'm willing to pay something for that but not 30% or double (which it often is).

And, of course, it isn't just that. For Best Buy in particular they tend to have the low end on many products (computers especially) so they aren't very attractive to buy from anyway if you are looking for anything beyond the bare bones.

[Ally]

I order more online these days because I hate shopping. However, when we buy something like a washer or toilet, toys, etc., I go to locally owned stores, I feel like they know their products better and they give better service. We get our appliances from a family owned store and its so nice to go in every 8-10 years and still see the same employees.

The toy store where I shop is wonderful. I can go in, give the age and interests of a grandchild and he always finds the perfect gift. So, no, I don't really shop, then buy online to save. I either buy it online to begin with or shop mostly at local stores. I'm willing to pay a little more for the time they spend giving me advice.

I hate Best Buy, it's so confusing and many of their employees don't have a clue about the products.

[MichaelB]

The need for the lowest price has characterized the US consumer for some time. It is sort of a bipolar attitude, because we want the absolute lowest price, but then bemoan the loss of well paying jobs that is one effect. Best Buy didn't really carve out a niche where they had a leadership position, so there has never been a compelling reason to shop there.

Sales tax policies add to this problem.

[mystang52]

I often buy things from a brick and mortar store (e.g., REI, Best Buy)that I know I could get for less online. But many times it's because I know the price differential is not large.
I haven't needed a big ticket item in a while, so honestly don't know what my cut-off is. But it would sure be tough to spring for, say, an extra $100 for an identical item online.

[rbmrtn]

It's not just the price, it's a hassle to drive to a store, fight the traffic, crowds and wasted time. I can order something online in 5 minutes versus wasting an hour going shopping. Also 9 times out of 10 they don't have what I wanted in stock anyway so it has to be ordered. Groceries are about all I buy at a local brick-n-mortar store

[Midpack]

Interesting a few of you mention you're willing to pay a (small) premium but not X%. If a retailer has inventory in a central warehouse with X employees, they can service all their online business from there.

For the same retailer to also do a brick-n-mortar business, they have to also have a store (purchase or lease), employees, their own inventory, overhead (utilities, permits, local ads, etc.), their own systems (inventory, purchasing, transactions, payroll, accounting, etc.) etc. I'd think all that would add considerable expense, I wouldn't expect a retailer to be able to also provide the extra brick-n-mortar experience without a considerable premium. And I knowingly pay a substantial premium when I'm inclined to go to a physical store - because I want that option in some retail sectors.

Online only retailers are getting a substantial benefit from full service retailers right now without paying anything for it via "showrooming" - not sure that's "fair." In some retail sectors, we might be sorry if all the brick-n-mortar guys go under. Though there are some where online only will probably be just fine for almost everyone.

[Chuckanut]

Recently went to a Microsoft store with a buddy who was in the market for a new computer and software. If Microsoft copied the Apple Stores they certainly copied all of the right things. The salesperson was great. Gave us some pros and cons and included a few important things we did not know enough to ask about (such as did the laptop computer have the power to drive a much bigger monitor.) He unboxed the computer, set it up, installed the software. My friend was unsure about hooking up to his home network so the guy walked him through the steps and then watched as my friend repeated the process correctly. He gave my friend his card with number to call if he had any problems. Of course, he can bring the computer into the store at any time if he has problems.

The entire cost was maybe $120 more than the cheapest online place and well worth it.

[Bestwifeever]

I don't really like shopping for something specific in the big box stores (including WalMart and Target) as they are basically giant warehouses with cash registers--sometimes hard to find specific items, and almost always a shortage of people working the registers. It probably won't cost Best Buy that much to honor Amazon's prices.

I bought my no-contract smart phone at a small Best Buy phone store in a mall--the clerk was intelligent and helpful until I said I didn't want the insurance (the phone was maybe $129?) before he got too far into his spiel. Then he couldn't get rid of me fast enough. I went to RadioShack for a case and the young woman working there was exceptional and happy to answer my questions that the Best Buy guy didn't take the time to (and I now know that RS sells the same phones, so I will go there when I move to a 4G phone.)

Then I went into a regular big box Best Buy to get an accessory for the phone and no one came over to help me although I saw several clerks not too obviously busy. After a few minutes I pulled out the smart phone and had just turned on the Amazon app to scan the bar code of the thingie I needed and zoom, a guy was right there to help me.

I'm thinking Amazon might open some brick and mortar showrooms once we're all paying sales tax and lose that indirect discount. But with its easy no-fault return policy, I've never felt a need to look at something in a regular store before ordering from Amazon.

[Ronstar]

I like Best Buy, and buy things from them a little less than I used to. "Showrooming" doesn't work for me very well because I'm an impulse buyer. But lately the convenience of buying online has become more important than my need to have something immediately, so I have started going the online route. But I don't "showroom" it first - just research it online and then buy online.

[scrabbler1]

I am a bit of the impatient type, so when I determine that I need to buy something, I just want to go out and get it right away if at all possible. I buy on line only if I have no choice. I live pretty close by to stores such as Best Buy and book stores so I just drive over there and get it after doing some research (if it is a big ticket item). I have bought on line and had it delivered to Best Buy to avoid shipping charges although I was a bit annoyed by the wait time at the pick-up counter once.

[easysurfer]

For larger priced items, where there is such a price discrepancy between online and big box stores, I might showroom. But actually for smaller priced items, sometimes I do the opposite. I might "poll the audience" reading the Amazon reviews and if they are great reviews, I'd go and pick up the item at the store. I'm not much a fan of Best Buy though as their prices always seem high and I'm not a big fan of their cue line when purchasing.

[rodi]

I think Best Buy's declining sales has a lot to do with their declining customer service. I know they are on my "NEVER AGAIN" list.

I ordered some inexpensive digital cameras for my son's birthdays. I want different colors since they will fight over them otherwise. The shipping date showed they'd arrive with plenty of time. (B'days are sort of in the Christmas season - but several weeks ahead.)
They arrived and one was hot pink instead of red. The picture online was a dark/wine red. Not anything like what I got. I called and they promised to ship a new one out, and gave me info to return it by fedex. Turns out they don't pay for fedex. And turns out I could have returned to the brick and morter store - but the CSR didn't tell me that. $7 out the door to return something that I could have returned locally for free.

2 weeks later, after the birthdays pass, I get the new camera - again it's hot pink. I'm no talking mostly red, with a pinkish tinge... I'm talking screaming bright hot pink. Not at all appropriate for my little macho boy.

Each time I call it's over 2 hours on hold. yes - over 2 hours.

So I call again - this time they tell me to go to a store... tell me there is one in stock at a store near my work. So I go there. It isn't there.

The (very nice) clerk at that store sends me to another store - closer to my house.
I find the camera - the sku label says red - it's HOT PINK. I call over a clerk. I ask what color it is - he says "hot pink". He agrees that the sku is wrong. He looks online and agrees that the picture is red, not hot pink. Doesn't matter... they don't have red or any other color except hot pink.

So I make the exchange for the black one (same color as the one for his brother) and figure we'll deal with the squabbling.

All this time I'm reading online on the bestbuy.com forum (while waiting on hold for best buy csr's.) Find out that my situation is mild compared to most. I only lost $7 in shipping and about 6 hours of my time. (between being on hold, driving to ship the return, driving to two different stores.)

http://www.forums.bestbuy.com/t5/Bes...om/bd-p/Dotcom

It's not worth buying at best buy. I'll go to Fryes. At least there they don't pretend to have good customer service... and the prices are cheaper.

[ERD50]

I'm in alignment with the way Midpack feels about it in the OP. If you spend time with the salesperson, or check out the physical unit in the store, you kinda 'owe' them something.

But there is no legal requirement, and it wouldn't be enforceable anyhow, so the B&M stores are going to have to find a way to deal with this. Times change and one must adapt.

On the flip side - I often get better information on-line than I can get in a store. I can DL the owner's manual, maybe even email/chat/call in for a product question. Odds are, an on-line 'specialist' may know a heck a lot more about the product than a salesman on the floor. On-line, they can route the question to someone who knows that product line. A B&M can't afford a specialist for every product in every store, every hour.

And when I go to Best Buy and I need a generic audio patch cable or HDMI cable, and I see that they only carry $30 branded ones, when I can get them on-line for $2-$3 with shipping, I don't feel a lot of empathy for them.

-ERD50

[Midpack]

FWIW, the point wasn't meant to be a critique of Best Buy. It was, if brick-n-mortar stores cease to exist for whole retail sectors (due to show rooming), would you regret it? Maybe with an example retail sector.

Quote:

Originally Posted by ERD50 But there is no legal requirement, and it wouldn't be enforceable anyhow, so the B&M stores are going to have to find a way to deal with this. Times change and one must adapt.

They may deal with it by ceasing to exist out of necessity if most people keep "showrooming."

Quote:

Originally Posted by ERD50 On the flip side - I often get better information on-line than I can get in a store. I can DL the owner's manual, maybe even email/chat/call in for a product question.

Can't disagree with this POV. I often know more than the sales person when I go into stores these days, thanks to online research beforehand. The only exception I can think of is Nordstrom's, they're still remarkable and I don't mind paying their higher prices when I need that kind of service. But I suspect they're going to feel the pinch if they haven't already...

[Chuckanut]

Quote:

Originally Posted by Midpack Can't disagree with this POV. I often know more than the sales person when I go into stores these days, thanks to online research beforehand. The only exception I can think of is Nordstrom's,

Another one is Men's Warehouse. Once I had purchased a shirt that did not fit quite properly at the shoulders. The salesman would not let me leave with that shirt. He found the correct size in another shirt that matched the rest of the outfit. "I can't let you leave here looking like that", was his comment.

I was glad to see he had pride in a job well done.

[ERD50]

Quote:

Originally Posted by Midpack They may deal with it by ceasing to exist out of necessity if most people keep "showrooming."

That would reduce my options, so I wouldn't like it - but that won't stop it. I do try to patronize the mom/pop shops when it makes sense for me, hoping they stay in business and continue to provide me with options.

IIRC, Amazon was talking about having so many warehouses that they would provide same-day/next-day delivery on almost everything? At that point, B&M is going to be in real trouble.

But there may be creative ideas. Just give up on commodity items - why take up expensive floor space? Maybe the B&Ms that are left deal only in product that does require some customer hand-holding. And those suppliers would give some B&M stores exclusives. The conventional wisdom was that Apple could not survive with premium prices in a commodity world, and look how that turned out. Note that they don't allow retailers to discount their products.

-ERD50

[Nords]

Quote:

Originally Posted by Midpack Heard a story this AM about how Best Buy is having trouble turning a profit. I assumed once Circuit City died off, Best Buy would do reasonably well. The journalist said Best Buy (and many other brick-n-mortar retailers) are getting killed by people who go in and scope out products and then go home and buy them online. Though I had not heard the term "showrooming," I knew it went on but I hoped it wasn't too widespread - evidently, and not surprisingly it is. What do you think of this phenomena?

Quote:

Originally Posted by rodi I think Best Buy's declining sales has a lot to do with their declining customer service. I know they are on my "NEVER AGAIN" list.

Quote:

Originally Posted by Midpack FWIW, the point wasn't meant to be a critique of Best Buy. It was, if brick-n-mortar stores cease to exist for whole retail sectors (due to show rooming), would you regret it? Maybe with an example retail sector.They may deal with it by ceasing to exist out of necessity if most people keep "showrooming."

I think showrooming is the least of Best Buy's problems, although it certainly makes a convenient excuse for their executives to whine about.

Any showrooming tactics can be overcome by actual customer service.

One reason that I've come to despise Best Buy some in-store customer service is because the sales clerks have no appreciation of presbyopian customers. If a 20-something starts operating a piece of equipment too fast for me to see what's happening, and if nobody in the entire store employee team is over the age of 30, then I'm probably not going to get customer service. If they want to sell to a wider range of customers then they need to train their sales clerks to do so.

Hopefully they can figure out how to make their sales goals from the disposable income of their cohort age group. Good luck with that.