Big-box stores attempt to lure online shoppers
By Abha Bhattarai | Capital Business,
Laura Harders used to spend weeks perfecting her Black Friday shopping strategy. She’d study advertising circulars, then draw up a blow-by-blow plan for hitting the best sales, enlisting friends to help.
But this year, she is forgoing the long lines and early morning wake-up call in favor of shopping online from her home in Manassas.
“I considered going to the stores,” said Harders, who runs the blog Beltway Bargain Mom. “But then I thought, why would I? I can get great deals online without having to run out and fight over items on the shelf.”
Customers like Harders have big-box retailers — including Target, Best Buy, Wal-Mart and Toys R Us — stumped and pulling out all the stops to lure shoppers out of their homes.
“With brick-and-mortar stores, you have to pay rent, you have to pay your bills, so companies are starting to say, ‘Wait, how do you get more people in our stores?’ ” said Trae Bodge of RetailMeNot.com, a Web site that specializes in online coupons and discounts.
Target has begun offering free WiFi to help customers access the company’s mobile app and online coupons. J.C. Penney is giving away free family portraits throughout November, as well as complimentary haircuts to children attending elementary school, a promotion the company started in August.
And Wal-Mart and Best Buy have promised to match online competitors’ prices in an effort to combat “showrooming” — the practice of scouting out items in retail stores, then buying them online for lower prices.
“We’re taking showrooming head on,” said Amy von Walter, a spokeswoman for Best Buy. “Anytime someone comes into our store, it’s an opportunity for us to make a sale.”
Last year, Best Buy began placing company-specific bar codes on its products to make it difficult for customers to quickly scan an item and compare prices. But it estimates that about 15 percent of customers still go into Best Buy with the sole intention of checking out products they plan to buy from a competitor’s Web site, von Walter said. The figure is up a couple of percentage points from last year.
Experts say showrooming is on the rise. A survey by IDC Retail Insights found that about 20 percent of shoppers — more than twice as many as last year — plan to “showroom” this year.
“Retailers can’t deny it anymore,” said Renato Scaff, an executive partner at Accenture. “Amazon has taken the fight, literally, into its competitors’ stores.”
At the same time, showrooming has become easier with a proliferation of smartphone apps. In the fall, Amazon.com released Price Check, an app that encourages customers to scan bar codes from competitors’ stores and compare prices with those on Amazon’s Web site. Ebay and Google have released similar apps.
“There are more apps, the apps are better, more consumers have smartphones,” said Richard A. Feinberg, a professor of consumer sciences and retailing at Purdue University. “Last year, it was insignificant. But this year, stores are paying attention.”
Online sales are expected to grow 12 percent this holiday season compared with last year, to as much as $96 billion. That far outpaces the 4.1 percent increase in overall retail sales expected through the holiday season, according to the National Retail Federation. Overall, online holiday sales are expected to make up nearly half of the $210 billion projected to be spent online this year.
To close that gap, retailers are increasingly finding ways to blur the lines between in-store and online shopping. Target has outfitted 20 of its most popular toys with QR codes that shoppers can scan in-store to buy the item and have it shipped directly to their homes. The Container Store is offering free in-store pickups for orders placed online. And at Kmart and Sears, shoppers can use layaway to buy items both in-store and online.
Wal-Mart customers in Northern Virginia also can opt for same-day delivery.
Not everyone prefers online shopping, though. One recent Sunday afternoon, Jesse Alston, 21, was looking for music-editing software at the Best Buy in Columbia Heights. Before coming to the store, Alston — who said he prefers to buy items in-store because of security issues online — had checked out Best Buy’s Web site at home to ensure that the item was in stock.
“I usually check both sites: the store’s, to see if it’s available, and Amazon,” Alston said. “If it’s cheaper on Amazon, I might bite the bullet and buy it online.”