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showrooming

Wooing shoppers

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FIGHTING BACK: The transformation is a strategy against pure-play online retailers like Amazon. com

As online shopping has surged, traditional retailers have lost millions in sales to so-called showrooming - when shoppers check out products in stores that they then buy from websites like Amazon. It has become so bad that Best Buy even replaces standard bar codes with special Best Buy-only codes on big ticket items so they cannot be scanned and compared online.

Now some big retailers are taking a new approach to the dreaded showrooming by transforming their stores into extensions of their own online operations. Walmart, Macy's, Best Buy, Sears, the Container Store and other retailers are stepping up efforts to add web return centres, pickup locations, free shipping outlets, payment booths and even drivethrough customer service centres for online sales to their brick-and-mortar buildings.

"We are living in the age of the customer, and you can either fight these trends that are happening -showrooming is one - or you can embrace them, " said Joel Anderson, the chief executive of Walmart. com for the United States. "We have a lot of assets, but they're only assets if you embrace the trends of the customers. "

In making the changes, the big retailers are betting the future on shoppers like Sue Sheffer. Sheffer, an information technology specialist in Bunker Hill, West Virginia, shops for items like clothes, electronics and even coffee online. But she also likes to receive her purchases as soon as possible. When buying shelving from the Container Store, she ordered it on the web in the morning and picked it up during her 30-minute lunch break that day. And there were no expensive shipping fees.

Fiona Dias, the chief strategy officer at ShopRunner, which coordinates shipping for retailers, called the trend "really an offensive strategy against Amazon and pure-play online retailers. "

"Unfortunately, stores have been portrayed as the ugly stepsister here, " she said. "They do have disadvantages, but the advantages of having a physical footprint are many. "

One advantage is the ability to reach customers who pay with cash. In April, Walmart began allowing shoppers to order merchandise online and pay for it with cash at a store when they picked it up.

Even without the cash option, in the six years since Walmart has allowed online items to be picked up in stores, customer demand has been high. More than half of the sales from Walmart. com are now picked up at Walmart stores, Anderson said.

With the cash option, Walmart was trying to appeal to customers who did not have bank accounts or credit cards. Walmart says the majority of in-store purchases are made with cash or debit cards, and that about 15 per cent are made with credit cards.

In the first weeks of the cash option, Walmart noticed that a different set of customers also found the service appealing. About 40 per cent of the customers who paid with cash when ordering online ended up using noncash options, like a credit card or cheque, when they arrived at the store. They simply had not wanted to provide that financial information online. "There's still a large segment of people out there afraid of identity theft or just plain putting their credit card online, " Anderson said. The service already accounts for 2 per cent of Walmart. com's sales.

Reader's opinion (1)

Promita BoseJul 10th, 2012 at 14:33 PM

There was a time when retailers wanted online shoppers and now they want offline..Weird!!

 
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