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New study explores Amazon's impact on brick-and-mortar retailers

By Shawn Knight
Feb 28, 2013
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  1. A recently published report reveals that a number of brick-and-mortar retailers risk falling victim to showrooming, where consumers go to look at items at a local store before placing orders online. According to Placed: Aisle to Amazon, consumers that showroom...

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  2. Did they ask the contra-question...did you look at Amazon before you went to the local store with buy-it-today convenience, no hassle of filing "Use Tax" (required by my state) and easy return if the hidden stuff inside is not good for some reason? I probably do more of that than some, and it works out to about twice the level of my actual Amazon purchases.

    Some folks "save" by not paying sales tax (or its proxy, use tax), but this will go away.
     
  3. Trillionsin

    Trillionsin TS Evangelist Posts: 1,106   +44

    Retailers make prices reasonable, problem solved?
     
  4. Timonius

    Timonius TS Guru Posts: 585   +34

    Retailers make wages reasonable, problem solved? ...

    There's nothing stopping 'Brick and Mortar' retailers from setting up their own online experience and potentially making online pricing exclusively cheaper....but wait, people will want those prices in the stores? >.<

    Personally, I use the showrooming technique about as often as I'm susceptible/exposed to ads (FF w ABP, no Cable, etc.). I'll buy what I need to buy when I need to buy it, and I usually go with the lowest price regardless of the debate. Obviously classic shopping has it's own benefits. My food is fresh and my clothes actually fit. Everything else is fair game.
     
    Littleczr likes this.
  5. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,157   +739

    yeah, all they have to do is fire the sales people, turn off the lights and heat, and stop paying the premium on property tax for being in a commercial location. Problem solved.

    Notice who's not on the list because they're gone. Borders and Circuit City, and probably a few others.

    Funny how this story comes the day after Sergey Brin from Google telling us how stores are obsolete because no one wants to touch or hold an item anymore, they just read reviews online and buy it.
     
    Timonius likes this.
  6. TomSEA

    TomSEA TechSpot Chancellor Posts: 2,372   +407

    I've never engaged in this practice, but know a couple of people who have. Mainly for new HDTV purchases.

    It's just too easy to do research both for reviews and pricing on the Internet. I don't need to actually see or hold an item - can get all the purchasing info I need off the net. As I'm a Prime Amazon user with free 2-day shipping, 80% of what I buy comes through them. Excellent pricing, fast delivery, gigantic selection, easy returns - it doesn't get any easier than what Amazon offers.

    Haven't been to a mall in forever. But met a friend at one about a month ago and all I saw in there were teenage kids hanging out. No one was there to do serious shopping.

    Times are changing...
     
  7. Sniped_Ash

    Sniped_Ash TS Enthusiast Posts: 132   +38

    I get the concept of showrooming, but only for big ticket items. If I've made the effort to get to Bed, Bath & Beyond, Petsmart, or Barnes & Noble, whatever I'm looking at probably isn't very large or expensive, but probably is something I need *right now*. Going home and ordering it online and waiting for it and then dealing with throwing out the packaging just sounds so wasteful and dumb to me.
     
  8. howzz1854

    howzz1854 TS Maniac Posts: 585   +79

    At least the retailers are trying. I recently went and bought a 60inch LED TV, it's top of the line Samsung 2012 model. while the retail store I went to had it priced at $2900, they were able to match the amazon price of $2200 right on the spot and gave me no hassle. I was happy because they hand delivered the TV to my house on the same day. sometimes Amazon would ship out HDTVs with UPS, which is usually rough with the TV's. I would have no problem with buying at brick and mortor if they continue to have this kind of no hassle attitude. now that Amazon is forced to pay sales tax, it kind of leveled the playing field a bit. but I agree that retailers can only have a future if they stay ahead and be pro-active.
     
  9. Tygerstrike

    Tygerstrike TS Enthusiast Posts: 827   +93

    This is a subject near and dear to me as I run a retail business. I know for a fact that ppl just come into my store to to look at a item or pick my brain and then go to Amazon or where ever that is online. Yes it hurts. A LOT! People dont seem to realize that brick stores are needed. Not everyone can either go online or work online. These stores provide more then just a showroom so people can be cheap. It also provides jobs and revenue for whatever city or town you live in. Businesses pay taxes that pave roads and send peoples kids to school. However no one ever thinks like that. To them its how can I get X item super cheap. Its a slippery slope. Eventually we will see online companies having to charge what brick and mortar stores charge or close to it. The online business model is a great idea, but once the online sales overshoadow the brick sales by a large margin we will see the big businesses going after online retailers in court for unfair selling practices.
     
  10. Ravik

    Ravik TS Rookie Posts: 44   +8

    Here's the secret sauce, and I hope someone in the brick & mortar scene is reading this. What's the one commodity that Amazon.com doesn't have? Employees that talk to people.

    Presently, these employees are generally not very sharp or skilled in their trade. They're often "college" kids simply looking to make a few minimum wage bucks to buy tickets to weekend movies, etc. Very rarely do they actually provide any sort of relevant sales information to someone tech-savvy. It's generally misguided information given to baby-boomers who failed to follow the technology and learn how to use a mouse...but I digress. :)

    If brick & mortar retailers want to survive, they need to train "sales people" who are skilled and knowledgeable in sales, and they need to give them the complete freedom to "haggle" and "negotiate" their own prices down. Retailers like Best Buy try to teach their employees things like profit margins and gross margins, etc...but there's no reason to know this since they have to go looking for a manager to get approval for discounts and overrides. Meanwhile, Amazon.com simply says "this item is now 50% off!" and the showcasing world buys in bulk.

    So if retailers want to resolve this problem, they're going to have to stop employing "shirts" and start employing sales employees and give them the authority to change the final price tag. It's the only real advantage they have over sites like Amazon.com.

    Cheers!
     
    davislane1 and BlueDrake like this.
  11. amstech

    amstech TechSpot Enthusiast Posts: 907   +241

    Certain retailers will always be around because there is nothing like seeing and feeling a certain product/item in your own hands. Even with a super high-def 360 degree video of a product.
     
     
  12. Timonius

    Timonius TS Guru Posts: 585   +34

    Let's not forget smell and taste! Haha!:D
     
  13. Tygerstrike

    Tygerstrike TS Enthusiast Posts: 827   +93

    Ravik
    First I partially agree with your statement. However there is more to it then you may know. Training, no matter how its done, takes money. Be it a classroom setting or a simple computer program. The training involved no matter how comprehensive, is normally secondary to the experiences learned and developed during a normal workday. That being said, no amount of training is going to help you cover every situation you may run into. Once that training is completed, a business has to hope that the employee is going to stay around long enough to make that training useful. Hence why you see a lot of companies just tossing the shirts into the deep end. Sink or swim. They save money on any training and the weak employees dont stick around.
    Second: No company is going to give a sales associate the power to "haggle". That would effect the bonuses of those corporate bigwigs. Who by the way are the same ppl who decide to not do the training so they can make a better bonus.
    Third: What you are asking for is called "skilled employees". No business is going to hire a skiled employees as they cost two to three times more then a teenager or minimum wage worker. It just isnt done. No business gets into business with the idea to lose money. They want to make as much as possible with the least amount of either effort or capital expenditure.
     
  14. Tanstar

    Tanstar TS Enthusiast Posts: 205   +18

    So the total message I get from your two posts is that: brick and mortar stores stores should continue doing what they are doing and Congress should force Amazon and others to raise their prices so you can stay in business? Fail. If all business owners feel as you do then brick and mortar stores are doomed. After you close shop Congress may have to tax online stores or citizens to replace the money lost from your taxes, but that will be too late for your business.
     
  15. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 6,267   +1,552

    The problem I have with Brick and Mortar stores is that fact, they are not always available when needed. Brick and Mortar stores could never keep up with supply and demand in every little crook and cranny of this globe. For smaller communities the only way to purchase is to travel several miles or purchase on-line.

    Maybe Brick and Mortar stores could start offering a service to order and then offer to deliver on-line goods. This would better convenience the consumer, so they wouldn't find need in watching their doors for delivery.
     
  16. TS-56336

    TS-56336 TS Addict Posts: 604   +106

    This seems like an unethical business practice. I don't know why - it just doesn't sit right. Legal but dirty. I have to wonder if local retailers can turn this thing around on Amazon. Say, if people become so accustomed to trying things out before buying on Amazon that they make themselves new possible customers of the local retailer before each online purchase.
     
  17. davislane1

    davislane1 TS Evangelist Posts: 1,532   +599

    The business practices (pricing) are ethically sound -- it's competition. It's the consumers who are acting unethically by showrooming retail businesses. As Tygerstrike alluded to, it's a pretty unscrupulous tactic to use physical retailers to gather information on products you intend to purchase only to sign into your Prime account when they confirm your interests. The customers are the bad guys here, not Amazon et al.
     
  18. Ravik

    Ravik TS Rookie Posts: 44   +8

    Tygerstrike:
    Exactly. "Shirts" are what I equate to as a non-skilled employee. A "skilled" employee would be someone who knew how to negotiate. You're also correct in that it would take money to train folks how to handle the "haggle" gun, but I've done it personally, and can verify that it can be done. You just have to hire the right people and not just any college kid who can fit into a blue shirt and claim to know a thing or two. They need to know how to take that information and make a sale. Jim Camp's excellent "No" and "Start with No" are excellent resources on the subject, and I wish all companies who are involved in Sales would take the time to study them...

    Tanstar:
    Your comment about "brick and mortar stores [being] doomed" may be more accurate than you think...and that's very unfortunate to say... :(
     
  19. Tygerstrike

    Tygerstrike TS Enthusiast Posts: 827   +93

    Ravik
    The problem is two fold. One companies just wont pay for "skilled" labor. They would rather hire unskilled as they are cheaper and can gain skills through training. Second part is even simplier. Its all about the monies!! A shirt may get to haggle but there is a price point you can not go under. Every corporation I have ever worked for has been pretty straight forward about offering discounts. You cant. Its not in your pay grade. I hear it all the time. "Can you match Amazon?" the answer is always no. Sorry I cant.

    @Tan
    Brick and Mortar stores are not doomed as there will always be services and merchandise that ppl need immediatly.
     


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