Target Looking to Combat Showroom Effect. Asks Suppliers for In-Store Products Only
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By way of the Wall Street Journal and Forbes, I learned that Target has recently asked many of its vendors to offer in-store products only.
Many reports indicate that retail stores are experiencing the “showrooming effect“. Essentially, consumers go in-store to look at and try out products, but then go online (sometimes in-store on the mobile) and purchase the same product for less at a competitor’s website, like Amazon.com.
To some extent, we’ve recently seen an example of this with 2(x)ist’s Evolve-brand recently launched men’s shapewear line. Granted, Evolve has been a Target-only brand for sometime, but I’m fairly certain many of the Evolve products have been available in-store only.
So the question I’m asking myself is whether or not we’ll start to see the tides changing even more and eventually see in-store or Target-only versions of Hanes and Fruit-of-the-Loom undershirts.
While this approach may not be too hard for the big manufactures to manage, if Target asks some of it’s smaller, niche suppliers to do that, it could become costly and potentially catastrophic for them to manage and fund multiple product-line programs.
I totally get why Target wouldn’t want shoppers to come in-store, then wind up buying the products cheaper online. But it seems to me the solution isn’t burdening it’s suppliers and forcing them to offer Target in-store only product lines.
As online shopping becomes richer, easier, and less expensive, I believe retailers have to get creative to make the in-store experience worth the visit. Maybe it’s some bridge of in-store and online shopping like the Walmart.com stores that popped up in some select malls during the recent holiday. Or maybe, they can offer some other incentive you can only get in-store.
Here’s an Idea…
Hey, I know!! What if Target put up some dedicated kiosks in their Undershirt (ok underwear too) department and offered direct online chat with a product expert – uh – like me! I’d know about every sku they offer in the category at that store, have samples of all them on hand, and be able to EFFECTIVELY help consumers make an informed in-store purchase.
I don’t know about you, but finding help in store is difficult enough, but most of their sales associates really have no idea about the products being sold. It’s kinda fun for me sometimes when I go to Target and ask their folks for help in selecting undershirts…I know they are trying…so I do my best to encourage them to help me and try to help them in the process too!
How about we take that concept a step further. What if Target also formed additional partnerships with online-only retailers in select categories, and if the in-store consumer purchased from that online retail partner via that kiosk while in-store, then the online retailer would pay Target a commission for the sale. Think of it! No stock to carry, no logistics, no real overhead, no shelf-space competition. Just a pure revenue play for Target to increase it’s overall margin.
Or is that too crazy of an idea? Let’s see what happens.
Category: News
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Tug is the world's undershirt expert. Looking for undershirt or men's shapewear information? You'll find it here on my site - guaranteed! You can also find me on Google +Subscribe
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Target is being ridiculous. Whenever I shop for certain products, I always use my smartphone to compare prices in my area and online–particularly at Amazon. It’s literally been years since I bought a new book from Barnes & Noble when I can get the same book immediately on my Kindle, or in two days by UPS for far less (including shipping) than I’d pay in the store.
But there are so many other products that I buy at Target because I enjoy the actual experience of shopping in person. Cleaning products, towels, bed sheets, etc. These are things I actually enjoy going into Target to buy. I can spend hours just shopping. It’s a totally different experience.
I’d also like to point out the irony of Target being undermined by the overwhelming power and popularity of the internet, just as years ago local retailers were being undermined en masse by the power and popularity of Target and Wal-Mart. It seems that if you build a better mousetrap–and sell it for less–the world will beat a path to your door.
well said my friend!!
Hey Tug, I understand what you are saying in your blog about Targets and the other big box stores. However I believe some discount store shoppers are still in it to get a “quick shopping fix”. They have money and they want their new t shirts or whatever it is NOW! These are the days of the burgeoning online shopping experience. There are many punters who are able to or have to wait a few days until they get their prize via the courtesy of the mailman. Logistically the internet is the best thing since sliced bread for ease of online shopping and research. However, there are those of us who still like the thrill of that quick shopping fix. I am fortunate enough to live in a city where there is a major box store or a strip mall on most of the major streets. I usually research the product online and then go to the store and get it. When I arrive at the store,thanks to web sites like yours Tug I usually have most of my research done. I bet I know more about the product than the 18 year old shop assistant who is usually talking about the date that they just had. All it then takes is for me to track the product down(come in shop assistant) and take it home the same day. WOW!! What a concept! Keep up the good work Tug! I love your website.
hey doug! thanks for sharing your thoughts my friend – i truly appreciate it.
don’t get me wrong, i’m not discounting the value of the retail shopping experience. like you, i too do a lot of online research before buying something, but if it’s something i want right now (like the new fancy flat screen tv we got not too long ago), i’m going to the store right away to buy it so i can enjoy it that night!
what i was getting at in the article above, was that i think the retail buying experience has to evolve and adapt so that it works more in tandem with our current shopping behavior. think about it, there is so much more information available at our fingertips via the internet than there was, say, five years ago – but the retail shopping experience hasn’t changed all that much.
let’s say you see a commercial for insta slim or slim ts. what’s the first thing you do? you hit the web, check out the product, and read reviews. all which help you make a purchasing decision. then you decide where to buy. while it would be ideal if a local retailer like target carried the product, the likely case is they don’t, unless it’s a common mass-market product. there are exceptions, but that’s the rule.
there’s another issue that’s been on my mind a long while too and this is good forum to discuss it. before i started this blog, i kinda believed that there were only a limited number of undershirts available. why is that? because when i visited my typical retail stores (target, walmart, macys, etc.) there were only a finite number of products i could be exposed to there. i saw the usual suspects like hanes, fruit of the loom, jockey, and some house brands, but frankly, i thought those were my only options. that is – until i started doing a lot of research online.
why are those the only product options at retail?
1) only a certain amount of physical space available,
2) retailer needs to keep only the highest performing/selling products in-store in order to optimize its profitability per square foot.
from a business pov, i totally get it. but it doesn’t really serve the best interest of the individual consumer.
what i’d love to see in place of all the racks at retail is more options to look at, less physical inventory, and a medium in which i could learn about the products quickly and easily. even if the actual product wasn’t in-store, if i could buy it there i would. if i knew that the retailer provided a great experience to learn about products, vs. just buy them, i know i would be compelled to go there vs. staying home in front my computer.
of course, keep the stores stocked with the most practical items, but allocate some space in each section where consumers could learn about new products, even if the retailer wasn’t physically stocking the item at the time, but rather facilitated the purchase.
break up the retail business model into demand categories:
1) high demand – keep in store
2) medium demand – keep in local/nearest warehouse (this space is way less costly than retail space) and ship it to customer from there (cheap/free shipping)
3) low demand – don’t stock it, but facilitate the sale and earn a commission from the sale
it goes without saying, there really isn’t any good replacement for the retail shopping experience and i am confident that the retailers will adapt (because they have to) and turn their current static shopping experience into a more interactive one, and do so in a way that will be profitable for the entire supply chain, while offering value to the end consumer.
i can’t wait to see it happen too! thanks again for your comments (& your compliment on my site)