Showdown Over ‘Showrooming’
Target Asks Vendors for Help Keeping Comparison Shoppers
http://online.wsj.com/article/SB10001424052970204624204577177242516227440.html
Just like Hollywood and the music industry have failed to grok the Internet, it seems that Target and Wally World are having problems as well. Yes, the raw costs-of-doing-business for Amazon and its ilk are lower, but it seems clear to me that with the bricks-and-mortar advantage of actual customer interaction the big-box stores could easily compete if they had the wit. Sure, some customers will always want to save a few nickels by shopping on-line (I must admit, though, that the sales tax issue creates a very un-level playing field and companies like Amazon should be required to collect and remit sales tax in almost all cases), but those customers should only be looking at a small collection of nickels between price, meaning the bricks-and-mortar stores should be able to get enough of a premium from their customers who want the product now (as opposed to 3-5 days from now (yes, I know, Amazon often gets things faster, but that is because they are smart enough to do a lot of the shipping company’s work for them)) to justify the additional cost of the store. In my mind, though, the management of the big box stores are too brain dead to adjust (see Why Best Buy is Going out of Business…Gradually for an excellent example) and Target’s idea of personalizing their products so identical products can’t be found on-line is missing the whole point. People will pay for superior service, just perhaps not as much as the big boxes traditionally expected. It should be trivial to order product on-line and run into the store and pick it up (immediately if it happens to be in stock, or when it arrives (in 3-5 days or less!)), then the big boxes would be their own showrooms instead of Amazon’s. No retail outfit will ever be able to compete with the costs of an organization like Amazon, but with excellent logistics (I see Wally World as almost there, they just have to shift their attitudes a wee bit and they could grok the situation) and being cognizant to the correct places to save costs (note: that would not be an educated sales force!) they can actually decrease the delivery time (to almost immediate) to the point where the customer decides they are happy to pay a premium to have it now instead of in 3-5 days.
