Post on 20-Jan-2015
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Showrooming: A New Threat in the Retail Industry
Jennifer RodriguezBrooke Maddock
Brittany DesmondGreg Grant
What is Showrooming?
Wall Street Journal
Online shopping
Potential Problem for the industry
Targets product variety• food
Electronics
Targets plea to supplier
Other business/industries Bookstore industry
• Codex survey
Amazon PriceCheck app
Overlapping products• Target/Wal-Mart/Best Buy vs. Amazon• William Blair and Co. study
Financial Implications Trouble keeping up with
competitors prices
Vast increase in online sales
Slow increase in sales• Target
Decrease in sales for Target
Financial Implications cont. Online companies
sell products in different ways
Wal-Mart and Target have similar problems
Marketing Implications
Product Target: Different Services and
exclusive products
Best Buy: Partnered with Geek Squad
Wal-Mart- In store greeters
Price
o Target, Best Buy and Wal-Mart are unable to compete with Amazon’s competitive prices.
Promtotion
Target: Commercials, catalogs, brochures
Wal-Mart: Layaway program
Best Buy: Geek Squad
Marketing Implications cont.
Place
Target: Opening smaller store
Wal-Mart: Wal-Mart Express
Best Buy: Plans to open smaller stores
Operational Implications Average overlapping income for
customers• Costo $96,000• Target $64,000• Wal-Mart $40,000
Number of stores in U.S.• Wal-Mart with 3,759 stores• Target with 1,750 stores• Costco with 425 stores
Continued Number of stores located
outside of U.S.• Costo with 157 stores• Wal-Mart with 4,557 stores
Each store is on average 170,000 sq feet
Wal-Mart Express Stores• 15,000 sq feet
Overhead Cost
Does showrooming/online shopping present a threat or
opportunity for Target?
Recommendations Unique customer experience
• No cost product service for products purchased in store
Red Card• Loyalty programs to retain customers
International expansion• Smaller stores highlighting most
successful and popular products
Any questions?
Works cited Bustillo, M. (2011, March 15). Best Buy's Net Drops 16% on Declining Sales. Retrieved February 6, 2012, from The Wall Street Journal website: http://online.wsj.com/article/SB10001424052748704425804576220391321433866.html Cheng, A. (2011, July 11). Retailers face uphill battle against Amazon. Retrieved February 6, 2012, from Market Watch website: http://www.marketwatch.com/Story/story/ print?guid=92c14726-ABC9-11E0-002128049AD6 Invictus. (2011, March 25). Best Buy: Amazon's showroom? Retrieved February 6, 2012, from The Big Picture website: http://www.ritholtz.com/blog/2011/03/ best-buy-bby-amazons-amzn-showroom/ Krause, R. (2012, January 1). Amazon Disease Plagues Retailers. Retrieved February 7, 2012, from Regional Business News database. Osman, J. (2011, December 4). Book Shopping in Stores, Then Buying Online. Retrieved February 6, 2012, from New York Times website: http://mediadecoder.blogs.nytimes.com/2011/12/04/ book-shopping-in-stores-then-buying-online/?pagemode=print PR Newswire. (n.d.). Retail Holy Grail and the 'Showrooming' antidote: Shopkick Drives More Than $110 Million in revenue for Retail and Brand Partners in 2011 [article]. Retrieved February 6, 2012, from Regional Business News database. (201201310900PR.NEWS.USPR.SF44582) Zimmerman, A. (2012, January 23). Showdown over 'Showrooming'. Retrieved February 6, 2012, from The Wall Street Journal website: http://online.wsj.com/article/SB10001424052970204624204577177242516227440.html