Target’s Showrooming Futility: It Should Be Winning But It’s Not

Written by Evan Schuman
January 25th, 2012

In a futile attempt to fight showrooming, Target is pressuring its suppliers to make it more difficult for Target’s customers to price compare. The most bizarre part is that Target is trying to game a system where it already has a huge competitive advantage. And in so doing, it’s squandering that advantage. Go figure.

The historic argument has been that E-tailers have a huge convenience advantage and that a retailer must combat that by leveraging its experience/ambiance advantage. But with showrooming, the customer has already driven to the store, parked, walked to the aisle and found the desired product. The physical store has the convenience advantage 10 times over.

The customer can pay for and take that item home right now or he/she can launch a browser/mobile app, navigate to the product, process that purchase, most likely pay for shipping and then still have to wait days or more to get the product. (With, the products may never arrive, but let’s not go there.) The brick-and-mortar has been dealt four aces, and it’s still somehow managing to lose.

This merged-channel psychotic episode began when Target CEO Greg Steinhafel dispatched a memo to the chain’s top suppliers and a copy was diverted to Citi Investment Research’s chief retail observer, Deborah Weinswig. The memo was begging the suppliers to help Target fight off the likes of Amazon. It stated explicitly that “consumers now expect a seamless cross-channel experience, want complete transparency on price and using technology to find the best deals regardless of retailer or channel,” and then proceeded to say that it didn’t want consumers to achieve those things.

“What we aren’t willing to do is 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, create a superior guest experience, provide hundreds of thousands of jobs and support local communities,” the memo said.

But that’s the point. If Target was creating a superior guest experience—or even an equal guest experience—this wouldn’t be an issue. With showrooming, we’re not discussing a consumer at her PC or looking at her mobile phone, debating between clicking to Amazon or driving to Target. The scenario being discussed starts after the consumer has already chosen to physically be at Target.

The rest of the memo discusses “a differentiated guest-focused assortment,” plus the usual retail supplier request for tightening margins.


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