Stores fight to keep customers from 'showrooming' on Black Friday

Consumers test out products at store, then head online to save on purchase

Published On: Nov 20 2012 10:52:43 PM EST
Showrooming
DETROIT -

With the Black Friday kick-off of holiday retail savings, this season is a popular time to buy big-ticket items and save money.

Online shopping allows for price comparisons and the convenience of dropping some cash without having to leave the house.

But, with the hassle of returns and "no refund" policies, who wants to buy a perfume without smelling it first or a computer without clicking some keys? Seeing an item in-person gives consumers the chance to test it out before buying.
This is where showrooming comes in. People essentially use the brick and mortar store as a showroom, but then might go online to buy the item and save some money.

"That really hurts Michigan businesses," said Tom Scott, of the Michigan Retailers Association.

Aimee Slaughter, of Detroit says, "If I can go online and get it cheaper, then why should I feel bad."

Jazzmin Sharara from Dearborn says, "Competition is important."

Scott says online retailers do have an unfair advantage.

Thanks to a loophole in the law, web-based merchants don't have to collect the 6 percent sales tax in Michigan.

"In most cases, they're willing to match online prices, the internet-based prices, but they can't match the price and then give up six 6 percent on top of that," Scott said.

Unfortunately for Scott's retailers, using the store strictly as a showroom has become even more common with the advent of smartphones to check prices.

Jazzmin Sharara says, "I'll scan bar codes sometimes and when I do that I check for better prices at other places so that I can save money."

How does it work?

Consumers bring their smart phones to the store, use one of the many apps available to scan the bar code, and are able to quickly see prices at online competitors.

Scott says some customers are downright rude as they use sales people to do some "showrooming." He's heard about sales attendants essentially hijacked by customers who "...find out all about the product, take up half and hour 45 minutes of their time, and then right there in front of them, they'll order it online."

The practice has forced retailers like Best Buy and Target to offer price-matching programs for certain online competitors. And, Target isn't giving any ground in this battle.

Target released a statement that said in part "...we believe our stores, helpful team members, great merchandise assortment and our online and mobile offerings create a unique value proposition that no online-only retailer can rival."

Dev Shapiro, the man who runs GottaDeal.com, says traditional retailers will need to adapt if they hope to survive.

"I think what retail stores need to do is lean down their operations, they need to embrace online sales and they need to be very competitive," he said.

And, if the adaptation isn't successful?

"Eventually, the showroom disappears," said Scott.

Kelly Featherston of Dearborn says, "It might put them out of business, but I mean it’s not my fault it's cheaper online than in person."