As the shopping environment is becoming more complicated, companies will have to negotiate compounding and growing multi-channel and multi-company “value poaching” challenges , illustrated by the following articles: In a 2003 Harvard...
|Scooped by Martin (Marty) Smith|
Friction will need to come OUT of the retail experience for it to stay competitive. Showrooming is more about dissatisfaction with the retail experience as a desire to save. Showrooming is an active protest.
No one showrooms the Apple store because the shopping experience is fun and traditional friction has been removed. Types of retail friction the Apple store destroyed:
* LINES - no lines creates a perception of amazing service.
* Brick and Mortar as classroom.
* Hang Out - all that free WiFi and cool stuff going on.
* Service Concern - Genius Bar resolved this.
* Bad Service - lots of PEOPLE to help who enjoy their jobs.
* No Deals - Apple doesn't let Amazon destroy their brand.
This last bullet is harder than it looks. Since Amazon plays the price arbitrage game better, on one single day a recent speaker at the Raleigh Internet Summit noted Amazon changed a price on a hot product 9 times, creating a "price match" that eliminates the advantage is key.
The problem is Amazon uses its retail arm as lost leader to support profits from its partner network. This means it is willing to sell things, especially very HOT things, at or below cost.
As painful as it sounds to play a match game with an algorithm brick and mortar retailers must either get shelf talker/tags that are live to the net (coming don't kid yourself) OR create an "Amazon Price Match" promotion.