Will 'showrooming' kill businesses?

[tenorish]

Bringing this into the context of the designers and labels discussed on SZ, one might ask- how many labels that one finds in brick and mortar boutiques are also offered by online only retailers?

I, personally, haven't come across any e-retailers stocking the designers we discuss and as far as I recollect there are designers that even prohibit their garments from being sold online (there probably are several other reasons behind that though). Hell, there are some designers that aren't even stocked in more than a handful brick and mortar shops around the world, let alone in an online only retailer.

Moreover, in the case of one of our affiliate boutiques (INK - Hong Kong), which could undercut other retailers since Hong Kong has no import taxes, they don't accept orders for certain designers from certain countries.. which makes it possible for the European boutiques to survive.

It's also not uncommon for boutiques to come out with exclusive lines with certain designers, something that would take a potential e-retailer further out of the equation.

I think for a niche market such as artisanal mens fashion "showrooming" shouldn't be as big a threat as in other mass markets. Boutiques, many of them bolstered by a strong relationship with the designers they showcase (Darklands with Boris to name just one..), should in my opinion have enough ammunition to fend off any threat from future e-retailers.

[michael_kard]

I, personally, haven't come across any e-retailers stocking the designers we discuss

What? The only designer I can think of who is not sold online is Harnden.

[endorphinz]

t for example apple, no one will find a better deal online on brand new apple products because they control their manufacturing and retail output and price,

it's illegal for a manufacturer to control/dictate prices. once upon a time the US had FAIR TRADE LAWS which allowed minimum pricing guidelines. they were repealed. the only thing a manufacturer is allowed to do is to control their distribution and set up a marketing model. they can pick WHO they sell. But choosing your retail outlets doesn't guarantee pricing. ie. a store you've sold in the past decides that they will now discount your products. You must continue to sell them because you sold them before.
of course. there are ways to circumvent this. non or late delivery of products etc.

now, all this comes from my dated experience. if there's anyone more recently informed,please correct me.

[cjbreed]

What? The only designer I can think of who is not sold online is Harnden.

he means online only. which is a good point. for some products, like high end fashunz, the combo of brick and mortar + website + good service is the winning formula. this problem is more relevant in other markets, like electronics, entertainment media, tools, stuff like that.

but i think the answer to the original question, "will showrooming kill businesses?" is yes, yes it will.

[cjbreed]

its definitely a problem in the market relevant to sz. but i think the larger issue of online retailers vs. brick and mortar has greater implications that could be more influential on the economy as a whole and the overall retail landscape in other markets.

[aussy]

From my experience, this is correct. My company buys products from hundreds of different 'boutique' builders that range from a guy in his garage to full operations. Each of these builders has set a minimum advertised price (MAP) for the products that we buy from them.

There are various consequences if we break MAP. Most of the time we're issued a slap on the wrist email asking us to correct pricing. We like to keep good relations with the people we buy from so we do so. They could choose to drop us as a dealer if we didn't oblige.

I can see the potential to ignore their plea for our advantage if they were especially reliant on our buying their product. Say we were one of their few dealers and buy product in bulk, pay ahead of time, etc. Once the product is in our hands, it is OURS, so we are free to dictate its price.

But there's no reason to do that. MAP, as the name suggests, only applies to the advertised price. These policies rarely take sales/coupon codes into consideration which are applied at checkout. So you can undercut competition without reducing the actual advertised price. Then the store just has to take into consideration what percent of their profit margin they could stand to lose in order to gain a greater volume of sales.

That said, I have no idea how the fashion market works. I feel that most designers/companies are screwed and not in the position to make demands from a store who's buy just financed their next collection or helped build their brand. A late delivery of products would definitely peeve the store and get the designer's message across, but as I said, I feel that many designers are not in the position to jeopardize their business relation with stores.

Still, I haven't seen a store go crazy with their pricing and immediately undercut everyone by a large amount. They have to think about their sales schedule since a lot of people wait to buy. Its a balancing act of profit margins and volume of sales.

and that is what I know

it's illegal for a manufacturer to control/dictate prices. once upon a time the US had FAIR TRADE LAWS which allowed minimum pricing guidelines. they were repealed. the only thing a manufacturer is allowed to do is to control their distribution and set up a marketing model. they can pick WHO they sell. But choosing your retail outlets doesn't guarantee pricing. ie. a store you've sold in the past decides that they will now discount your products. You must continue to sell them because you sold them before.
of course. there are ways to circumvent this. non or late delivery of products etc.

now, all this comes from my dated experience. if there's anyone more recently informed,please correct me.

[diorowen]

Well, first world problem :D
I guess its the matter of marketing technique. If i were a shop owner, i will definitely "trick" my customer to buy in store.
Because we can see the pros and cons of both buying online and in store, therefore I believe brick and mortar shop, has not lose to online yet.

[syed]

In the words of Yohji, everyone wants "Cheaper, cheaper, faster, faster". We spend less of our income on food or clothing, but we buy more and more than ever before because of the cheap prices. I heard on the radio that the average British woman has 8-10 pieces of clothing in her wardrobe with the tags still attached. How the hell did that happen?

I think part of it is the obsession with the idea of getting a bargain, which is obviously evident here in showrooming. If someone can get something cheaper elsewhere, it doesn't seem to matter if they actually need that item, but the knowledge that they can 'outsmart' the high street seems to be enough to compel them to buy. You see people with a tiny living room in which there's a full three piece sofa suite, massive tv, etc., to the point you can barely move around the room, but because they managed to get it 'cheap' somehow means it's worthwhile.

I've seen people crowding in to Primark and the like and coming out with bags full (in fact you pass the Oxford Street Primark any time of the year and you see women having difficulty carrying all their bags out) at sale time. It's not to save a few pounds here or there, otherwise they wouldn't be buying such cheaply made tat by the suitcase full. It's simply the idea of snagging a bargain. When things are so cheap, suddenly value goes out the window. A switch just flips inside people's minds and they don't see how much they are wasting. As my mother would say - "Pound wise, penny foolish".

The thing with showrooming is that we have been encouraged by so many areas of the media to become 'intelligent' shoppers that it seems an unfortunately natural progression. Watch tv for a minute and there are adverts with supermarkets bragging about how many items they do cheaper than their rivals, annoying adverts harping on about price comparison websites (this shit makes me want to throw my tv at the advertising man who came up with it). You get newspaper columns and websites and magazine articles aimed at trying to save a penny here, a penny there, without tackling the larger issues. People buying too much crap they can't afford and realizing they don't actually want after the thrill of purchasing it dies down.

As far as the issue of showrooming and fashion goes, I am on a limited budget, but I will happily spend a little more at an actual shop to buy something if the service is nice. If the SAs are friendly, know about the clothing they are selling, feel like they actually value you as a customer, then I don't mind if the price is a bit higher than online (of course the issue then is how much you regard 'a bit'). I am happy to pay a little more for the experience, because for me that makes the purchase all the more special. But then I factor in the reality that those purchases for me are not that frequent, simply because I don't buy clothing every weekend like some of my friends. In their cases I can see their desire to find a bargain, simply because of the amount they are buying.

Yes we can say that shops should sell things cheaper, or websites should be able to undercut their prices so much, but I think the bigger issue is addressing our buying habits. I'm sure in some areas of spending I'm just as guilty as others, but I think it's about identifying those areas and questioning it.

[wurlwyde]

Really interesting read. I enjoyed reading everyone's opinions on the matter as well.

[Faye]

I think that it’s also important to consider the dimensions of price difference that we are talking about here.
A.e. in my country, the 3-4 stores that carry the brands that I like are so highly overpriced, that from a pure economical perspective it would be against any common sense to not to do showrooming in them.
Personally, I don’t mind a 20% difference for a 150-200$ shirt between a foreign retailer with online store and local store, because the 40$ difference is what the in-store buying experience and no-waiting-time is worth to me.
However, it just doesn’t make sense to me, why I shouldn’t do showrooming for a +2000$ leather if I could save 400$ or even more by doing so, as much as I respect the people and the service that they offer to me in my local store. I’m aware that they need to charge more than any online-only retailers, because they need to pay rent etc. However, we are comparing local stores in different locations here! They both need to pay rent, taxes, staff etc. How come that there is such a big difference in pricing between them?! This is more than just about taxes!

All that said, I really don’t see a solution for that problem, since no one can dictate pricing on the fashion market. Designers depend on stores to finance their next collection, stores have to pay rent, and buyers are price-sensitive. And all 3 of them want to profit somehow.
In the end we should all ask ourselves, to what extent we want to support our local stores. How much we are willing to pay for our in-store buying experience. How much we want our local stores to survive in the long-term. And this is a very individual choice.

[Burlingame]

I've recently resolved to stop buying online because of a recent in-store experience. I'd been looking to finally get some drop-crotch trousers, but being that it was a cut I wasn't familiar with, I was never comfortable enough just looking at a picture online to actually make the purchase. Then, not long ago, I went to Hotoveli in NYC (figured I'd mention them by name since they're an affiliate here) and tried on various pairs. Being able to try stuff on, I figured out real fast what worked for me. Still, I thought it over and went back a few times, and each time I went back the sales assistants were extremely friendly and helpful and never pressured me to buy. Finally I made up my mind and bought the pants I wanted, and even though I might have been able to find them cheaper elsewhere, I was completely satisfied with my purchase because of the whole experience, not just because of the item.

There's just no way to get that online, and for that reason I'm going to stop worrying about saving a few dollars and just stick to buying in-store at places like Hotoveli.

[hallucination]

I've recently resolved to stop buying online because of a recent in-store experience. I'd been looking to finally get some drop-crotch trousers, but being that it was a cut I wasn't familiar with, I was never comfortable enough just looking at a picture online to actually make the purchase. Then, not long ago, I went to Hotoveli in NYC (figured I'd mention them by name since they're an affiliate here) and tried on various pairs. Being able to try stuff on, I figured out real fast what worked for me. Still, I thought it over and went back a few times, and each time I went back the sales assistants were extremely friendly and helpful and never pressured me to buy. Finally I made up my mind and bought the pants I wanted, and even though I might have been able to find them cheaper elsewhere, I was completely satisfied with my purchase because of the whole experience, not just because of the item.

There's just no way to get that online, and for that reason I'm going to stop worrying about saving a few dollars and just stick to buying in-store at places like Hotoveli.

Can;t agree with you. Was moving through some racks today like silent wraith in my Julius steez, like an urban warrior who never fucked a woman, with my iPod rocking Laibach and no-one approach me the service was shit

[couturehomme]

Personally, I wish the industry would go the complete opposite; all retail closes down and it's almost all online.........only for the online shopping costs to go way up due to an increase in returns and customer dissatisfaction.

Jokes aside, as someone mentioned earlier, maybe the approach to take is for retailers and manufacturers to work out better deals among themselves (like Apple). Better arrangements and exclusivity of products.

Manufacturers have A LOT TO LOSE if retail goes down, so it's prudent for them to work with retailers on sourcing agreements that are benefitial to the entire industry (online + retail). A good example would be the tvs that Costco sell. Most of them are Costco "exclusives" so that consumers simply cannot go and showroom and buy the exact same product on Amazon.

[Faust]

There is a huge demand for exclusivity in fashion retail because of the Internet, but imagine the job designers would have to do to make exclusives for all stores. It's just not feasible.

[michael_kard]

What's up with the whole internet vs. retail dichotomy? Online stores are retail sellers.