1. Welcome to the new Styleforum!

    We hope you’re as excited as we are to hang out in the new place. There are more new features that we’ll announce in the near future, but for now we hope you’ll enjoy the new site.

    We are currently fine-tuning the forum for your browsing pleasure, so bear with any lingering dust as we work to make Styleforum even more awesome than it was.

    Oh, and don’t forget to head over to the Styleforum Journal, because we’re giving away two pairs of Carmina shoes to celebrate our move!

    Please address any questions about using the new forum to support@styleforum.net

    Cheers,

    The Styleforum Team

    Dismiss Notice

Will 'showrooming' kill businesses?

Discussion in 'Streetwear and Denim' started by Gavin, Jul 6, 2012.

  1. Raindrop

    Raindrop Well-Known Member

    Messages:
    1,158
    Joined:
    Jan 31, 2012
    It's really more of a generation shift than anything.

    Not to stereotype, but some of previous generations prefer to go in store, touch and feel the product, then purchase it, even at a higher price. They don't like going online, shopping, browsing, it's simply too much of a hassle for them as they're not technologically inclined. Also, the fear of credit card fraud, theft, viruses, tracking shipments, etc., they're simply not used to it.

    However, this generation likes high quality goods at a fair, but preferably lowest price possible. It's only going to get worse, the more skilled we become with mobile browsing, touch pads, etc, it's simply too easy to click checkout, free shipping and return included.

    I personally see a lot of restaurants replacing retail stores as you actually need to be there to eat something.
     
    Last edited: Jul 9, 2012
  2. impolyt_one

    impolyt_one Well-Known Member

    Messages:
    14,457
    Joined:
    Sep 6, 2006
    Location:
    The Temple of Jawnz
    

    yeah sorry, that was a can of worms waiting to be opened - but I speak from the perspective of someone who has lived in Asia for 10 years and morals and ethics are approached differently here, there isn't always someone above judging you, rather it's society - the angle is different. I was relating that to the way efficiency is king and that people's wallets will do all of the talking. Long backroad explanation needed here.

    Anyway, B+M jumble shops with a bunch of trendy labels - who are they selling to if they're not online? Gas to get downtown is expensive, parking is expensive, stores can't ever carry all the things people want in the right colors and sizes, there's the dreaded feeling of trying to buy something and taking the gamble on whether it's gonna be there til the inevitable discount sale or not, there's a bunch of things wrong with that picture IMO.
     
  3. brad-t

    brad-t Well-Known Member

    Messages:
    18,535
    Joined:
    Jan 16, 2008
    

    Yes, that's obviously what he meant. (10)
     
  4. Alcibiades

    Alcibiades Well-Known Member

    Messages:
    3,230
    Joined:
    Mar 31, 2009
    Location:
    New Yawk
    

    These guys are selling niche, luxury, and in many cases exclusive products to a small audience... Stores selling more generic gear will continue to have issues, which is why you see retail and mall vacancies remaining high.
     
    Last edited: Jul 9, 2012
  5. lee_44106

    lee_44106 Well-Known Member

    Messages:
    8,106
    Joined:
    Jul 19, 2006
    Location:
    the Zoo
    


    I actually knew what you had try to say, but was somewhat giving you a hard time. :D

    But don't fool yourself into thinking that people who grow up in a Judeo-Christian environment are incapable/not actively doing shady stuff.....World history from the past 200 years has ample history of such.
     
  6. SkinnyGoomba

    SkinnyGoomba Well-Known Member

    Messages:
    12,589
    Joined:
    Jan 3, 2008
    Location:
    Princeton, NJ
    Showrooming is an interesting phenomenon, I don't think it will end the B&M store, people really do enjoy seeing a product before they buy it, it will make the B&M store fight harder for the customer and also chose a product line with a bit more interest in how else they distribute.
     
  7. Dbear

    Dbear Well-Known Member

    Messages:
    4,207
    Joined:
    Jan 26, 2011
    Location:
    San Francisco, CA
    This has been happening since forever.

    It's why Best Buy is closing stores and going out of business.
     
  8. Find Finn

    Find Finn Well-Known Member

    Messages:
    12,358
    Joined:
    Sep 10, 2010
    

    People showrooming have already done this and spend their time doing it, so why not just buy it then and there.

    If you add up what your time is worth that is a lot of wasted time.
     
  9. Parker

    Parker Well-Known Member

    Messages:
    7,755
    Joined:
    Jan 9, 2005
    Location:
    Yerba Buena
    Hasn't this been going on for, like, a decade? Amazon probably killed off 90% of the bookstores in my city. I think the shops that will succeed either offer some kind of added value such as expert advice, superior service or a unique environmental experience. Or the merchandise is so exclusive in that you can't really buy it anywhere else. Everyone else will have to compete on price and convenience.

    on another note, technology seems like it can connect consumers with manufacturers easier, bypassing retailers altoghter in some cases.
     
    1 person likes this.
  10. Find Finn

    Find Finn Well-Known Member

    Messages:
    12,358
    Joined:
    Sep 10, 2010
    It has, but people will go use the expert knowledge and then go buy it cheaply somewhere else.
     
  11. pickpackpockpuck

    pickpackpockpuck Well-Known Member

    Messages:
    4,314
    Joined:
    Aug 31, 2010
    Location:
    BKN, NYC, USA
    



    Yes on both. The shops that I like best (and assume are successful, though I don't know their finances) have a really focused identity and manage to engage with their customers on some level beyond just being a place to buy stuff. LN-CC does a good job of this, for example.
     
    1 person likes this.
  12. Douglas

    Douglas Well-Known Member

    Messages:
    14,658
    Joined:
    Aug 17, 2007
    Location:
    Purseforum
    LOL. Who "enters information into their smart phone?"

    Bar code scanning, people. We have the technology.

    Some people have already said it - this has been going on for a while, though this is the first I've heard the term "showrooming." Some businesses will die, others will adapt. There's no question service suffers. I'm all for maximizing value in the supply chain but the bottom line is that showrooms do create value by letting you touch and feel the merch. Some people want that service but don't want to pay for it, and their fate will eventually be that they can't have it at all. This bottom-line phenomenon, fueled by consumerism, fanned by cheap and easy access to information, leads to a lot of shit people say they don't like but actively drive anyways.

    Baggage fees, food and beverage charges, and seat selection fees on airlines? Yeah, you asked for those things when you slavishly searched and searched for the cheapest fare.

    Bullshit, trash-level home goods from places like Wal-Mart? Yeah, that too.

    You'll note there's no such thing as a bookstore. There is such a thing as a coffee shop selling mochas at 95% profit margins with books in it, though.

    You want help from a knowledgeable someone who actually knows where the books are, has read them, and can recommend others? Or whether or not that TV is compatible with a certain setup? Or how to use that camera, and which flash is best, and has it in stock?

    These are businesses that adapted. You reap what you sow.

    And people wonder why everyone who graduates with a BA ends up as a barista.
     
    Last edited: Jul 9, 2012
    4 people like this.
  13. Klemins

    Klemins Well-Known Member

    Messages:
    1,099
    Joined:
    Dec 9, 2006
    When I shop online it's generally due to convenience and being isolated rather than bargain hunting. I may look around if a price seems outrageous but will gladly support a business I like that may be a little more expensive instead of buy from the cheapest option.

    As others have stated, collabs add a uniqueness and security to different boutiques/shops, especially in fashion, but they may be too costly and simply not possible for many industries. Stores like Epaulet who rely largely on their own product are likely more immune but still be vulnerable to competitors with cheaper, more mass market alternates, especially if using the same materials.
     
  14. LA Guy

    LA Guy Opposite Santa Staff Member

    Messages:
    33,322
    Joined:
    Mar 8, 2002
    Location:
    Moscow, Idaho
    

    Sephora (I think, it may be another retailer) had to close shop in Spain because people were going in, using the samples, and just leaving. Moral of story: study new markets. One retail model does not fit all. Ikea in China is another hilarious retail story.


    The Best Buy experience sucked, so they went out of business. They didn't take advantage of what a B&M can offer, and consequently, suffered. Same day, free delivery, for example, would be an obvious thing to set up for a B&M consumer electronics store. It's a service that you can offer for local customers at a relatively low costt, that an online only store with a warehouse in dickweed, New Jersey, cannot, even if they paid top dollar. Cheap and free or cheap installation for anything from air conditioners to home theater systems. Same day pickup and delivery for defective merchandise on they massive ripoff you call an extended warranty. They could also offer a price match guarantee, which takes away most incentives to showroom. Remember, online only businesses have lower overhead, but they eat a fortune in shipping and handling. You ever try to ship a t.v. by UPS? It's soooooo expensive.

    Definitely don't make the Borders mistake (outsourcing their online distribution to Amazon, effectively making them a completely worthless company).

    It's not time wasted unless it's opportunity time lost. If you weren't going to be making money during that time, you've lost nothing and gained something by showrooming.


    With all due respect, this is a cop-out. One thing that I do is compare prices (of clothing and accessories) everywhere I go. And NYC prices are actually usually better than prices in smaller markets for the same goods. If your prices are not good in NYC, the customer will just walk a few blocks to get the same thing. Vendors give "exclusives" to specific neighbourhoods only, and even then, sometimes say "fuck it", and sell the same goods to different retailers on the same block. I know this because I've actually walked Manhattan blocks and visited every single store and inventoried entire stores (trust me, it's a grind. I do not do this when I go shopping for pleasure.) Also, being in a larger market allows you to sell more volume. This goes double for the internet side of your business. So, you sacrifice margin for volume. Of course, things are always a gamble, and you'd better have your sales projections pretty accurate, or you could easily end up in the red.

    I know that Canadian retailers suffer because they have some high taxes, but clearly, matching prices with US retail prices makes sense if you want that market. Ssense, for example, does this. Yes, you eat some of the costs. But the alternative is to not have access to a market 10 times the size.
     
    3 people like this.
  15. Gavin

    Gavin Well-Known Member

    Messages:
    599
    Joined:
    May 22, 2007
    Location:
    Toronto
    

    Ok, I was just making assumptions about NYC and the cost of doing business there...but not thinking for a second about the exponentially larger market and competition putting downward pressure on prices as well. Point taken and bad example.


    Yeah, we're hit a few ways: we pay sales tax on goods bought from Canadian distributors, we pay higher import duties on goods brought in from abroad, we have higher MSRPs based on out of date exchange rate assumptions, we don't charge sales tax to out of country buyers (which to be fair, is fair), and it costs us more to ship...but, like you said above, you sacrifice margin for volume and your projections need to consider all of the above in their calculations. Off the top of my head, I think that Canadian stores like Roden Gray, Four Horsemen, Nomad, Ssense, and us are usually priced in line with our international competitors, give or take, but doing so means the dollars are coming out of somewhere else. Nomad, for example, has to be losing money on some of what they just sold during their last round of markdowns.
     
  16. Gavin

    Gavin Well-Known Member

    Messages:
    599
    Joined:
    May 22, 2007
    Location:
    Toronto
    Also, the retail side is all very new to me...and seeing it from this side is pretty fascinating.
     
  17. LA Guy

    LA Guy Opposite Santa Staff Member

    Messages:
    33,322
    Joined:
    Mar 8, 2002
    Location:
    Moscow, Idaho
    

    Well, the last round of markdowns is just a way of liquidating the excess inventory, which, if you are an astute buyer, you should have, but in minimal quantities, at the end of the season (if you have no excess inventory at all, or worse, run out of inventory at the beginning of the season, you are leaving money on the table.) Any and all revenues off those last few pieces is all gravy. It's certainly still more profitable than selling to a jobber or a discount chain, which usually will not pay more than $0.05 or so on the retail dollar. On the other hand, if you have to drop your prices at or below wholesale to sell a large fraction of your inventory, that's when you are taking a real loss.
     
  18. PhiPsi32

    PhiPsi32 Well-Known Member

    Messages:
    2,664
    Joined:
    Jan 28, 2012
    This. The idea behind "show rooming" is that consumers go hands on with a product in store and then purchase it at a cheaper price online. The idea being that there is some value to seeing the product in real life. To some extent, this is a self correcting problem. As more shops fold up or reduce their inventories, consumers will have to grapple with products that are only available online. Online retailers can compensate for this effect by offering more generous shipping and return policies (as is becoming more common with clothing retailers). But these policies also push up the retail price attenuating the online discount. So while it may ultimately make more sense to pay the higher in store price and sales tax for the advantage of handling the product before buying, the convenience and perceived value of shopping online will lead to more internet sales.
     
  19. anbel02

    anbel02 New Member

    Messages:
    3
    Joined:
    Jul 9, 2012
    The economic downturn has made bargain hunters out of most of us. Most consumers don’t really care how, or even if, a retailer makes money. All they care about is which one has the best products at the cheapest prices. Now, some shoppers are going into stores to take pictures of merchandise, with no intention of buying. They go home, enter the items they want into a search engine, and find it for a much lower cost online. It’s great for them, and great for the online merchant but it is costing retailers business. However, some retailers are not taking it lying down. Retailers fight back against showrooming.
     
  20. El Argentino

    El Argentino Well-Known Member

    Messages:
    7,987
    Joined:
    Jun 28, 2010
    Location:
    Where the Truckee waters flow
    I don't have a lot of sympathy for the B&M stores. I'm sorry to cut it like that, but the customer is king, and if you're selling the same product at a noticeably higher price, you're cooked.

    Case in point: I was looking for new soccer boots recently. Went to my local specialty store (not a Dick's or other massive thing, but a locally owned soccer-centered shop). They've been in the Valley for years. First thing I noticed was the 1 sales associate working the floor. Just one guy in the store w/ me. I asked about the new collection of Nike boots coming in for the EURO and he showed me the 1 silo they had received (Vapors). Looking for Tiempos or CTRs, I started browsing some older models. Looked through their discounted section - they had some predators and old boots from 4+ years ago sitting there for only 25% off retail. Continued to look around as he unboxed more and more boots to go up on the walls - all the latest colors in only a few select boots. In a last ditch effort, asked if they'd price match other retailers, be it local or e-retailers, in order to move any of this stuff. He said they couldn't do that. What's more learned their return policy is non-existant - essentially for merchandise credit only, but once you give them money it's a sunk effort. Finally decided to just try on a newer boot for kicks and giggles - asked for my size. He said they didn't stock up to a 12, usually ending their size runs at 11. Well slap me silly. Thanked him for his "time" and walked out. Will never even go in there again.

    In comparison, I can go to a specific English footy website I know. Find the boot I want in the color I want, usually pick it up with some sort of special offer, and if not, STILL don't pay VAT, and have it shipped from England arriving in a week. Without the VAT and even w/ shipping I'm getting the boot for less than buying new from this shop. No contest here. If you can't compete with that sort of business, then fare thee well.

    1) Didn't have comparable stock levels, diversity
    2) Didn't have any method for dealing with request outside of their usual stock
    3) Didn't have ability to price kill ancient merch to make room for the floods of new stock, thus cluttering the store.
    4) Not only didn't currently have my size, didn't even order it on a regular basis.

    E-shopping wins.
     

Share This Page

Styleforum is proudly sponsored by