Guy walks into a bike shop, looking for shoes. The sales associates help him with several models and different sizes. They may even let the guy try the shoes out on a demo bike out in the parking lot. The guy then thanks the staff for their help, and leaves without buying the shoes. Why? He's going to buy them online.
Retailers call it "showrooming," and it's a pretty common (and crummy) practice. It affects lots of brick and mortar businesses, it's been around (in one form or another) for decades, but with today's smartphones it's easier now than ever before -- one can now purchase something from Amazon.com before they've even left the store they're in.
How common the practice of showrooming is, and its effect on businesses is a little hard to figure out for certain. I found a study on Internet Retailer.com that said about 43% of shoppers engage in the practice of showrooming -- it's more common with younger buyers, less so with older ones (whod've guessed?). Electronics retailers are apparently the most likely to be affected, according to surveys. But it is something that affects many brick and mortar shops.
With the rise of popularity and the ease of ordering on the internet, these kinds of shops have really taken off -- Nashbar and Performance made the move to internet sales, and countless other companies have added a lot of "virtual shopping" competition. Overnight deliveries from FedEx have even reduced some of the "gotta have it now" advantage that local shops had over their internet competition.
Showrooming has gone to a new level recently with apps for smart phones. Internet retailing giant Amazon introduced one of the first such apps. To use it, all one has to do is scan the UPC code on the item, and then the person can instantly purchase the same item from Amazon, probably for less money, and likely with no sales tax. Now there are lots of similar apps, some of which don't even require scanning a code -- some allow a shopper to simply take a photo of the item, and the app will find it for them.
I asked a friend, Kevin Madzia at one of my local bike shops, Century Cycles in Peninsula, OH, about the practice. Kevin is a sales and bike fit specialist at the shop, and also does the shop's website and blog. He said, "Showrooming definitely takes place and has an effect on us, but it would be impossible to quantify exactly how much." One of the things that makes it difficult to know the effect is that unless someone is brazen enough to whip out their smartphone and scan the item right in front of the salesperson, you can't know for sure if they're even doing it. Surveys seem to be the only way to know how much people engage in the practice, and who knows how accurate of a picture those give?
According to Kevin, some kinds of products are probably more prone to showrooming than others. "One that stands out in my mind is shoes and pedals. Even among entry- to mid-level customers, that seems to be something that people spend a lot of time thinking about before they buy, for good reason, and so some of them tend to become a little better informed about what's available and prices. Another factor may be that shoes tend to be more sensitive to variations in size (not as straightforward compared to shorts and jerseys), so people tend to practice showrooming with them more often."
There are a lot of stories published on the topic of showrooming -- just Google the word, and start reading -- but when I read comments that follow some of the articles, I'm frankly shocked and want to shake some people. One comment I found said essentially, "yeah, it's not fair to the store, but it's a tough economy, and you have to save money where you can." That article/comment wasn't particularly about bike shops (none of the articles I found was -- they mostly talked about big stores, like Best Buy and Target) but it was a pretty common response. And when it comes to bike shops, all I can say is -- great, you saved some money on your shoes, but is Amazon going to fix your bike when your bike shop closes?
Oftentimes, brick and mortar shops just can't match the prices of some of the online stores, so the best thing they can do to combat showrooming is to offer the best service possible. Again, CC's Kevin Madzia: "Even those first-time clipless pedal/shoe buyers, because of their trepidation, often end up buying from us because of our advice and ability to explain the different types of pedals and how to select the right ones, get used to them, etc. We explain to them that we'll install the pedals for them, set up the cleats on their shoes, and set their bike up on a stationary trainer to let them get used to using them. A person who buys pedals and shoes elsewhere won't get this same level of attention, at least not for free."
As the holiday shopping season approaches, I would definitely want to urge people to support their local shops. Seriously, speaking just for myself, there is nothing I'd rather get for Christmas than a gift card from my local bike shop (are my in-laws reading?). When it comes to internet sales, it's one thing if the online retailer offers something unique that the local shop doesn't carry. But physically going into a shop, looking over the merchandise, comparing, asking questions and getting advice from the staff -- and then buying the same item somewhere else to save a few bucks just really crosses a line for me.
Addendum: A few days after posting this article, I read this opinion piece on BikeRadar.com that seems to fit in with what I was saying here. Why Brick and Mortar is Still Relevant
This is "new" only in the use of online suppliers. I know of a 70s-80s pro shop owner in Toronto who used to be driven to distraction by people who would come in and work with staff on a "sale". They would "think about it" and buy the bike from a fly by night know nothing who discounted the price by $40-50. He eventually closed the store and re-opened an enthusiast-only shop to cater to the elite and committed hobbiest. The methods change but human nature is a constant.
ReplyDeleteExactly -- as I mentioned, people have been doing it in one form or another for quite some time -- but the new technology of smartphone apps has made it much easier, and perhaps more common.
DeleteRecent research suggests that people actually do more online showrooming than they do offline showrooming. Best Buy found that people would look things up on Amazon while in the retail store but mainly for reviews, because independent reviews by hundreds of people are hard to find in store. If the price was higher, but within some reasonable percent, people would buy in the store. I'm sure it's infuriating for shops to work with someone and have them buy from somewhere else, but for the online places that build tools, at great cost, for reviews, comparison shopping across items, and extensive spec sheets, and are loosing a higher percent to retail, it's even worse. Here's a recent article from the WSJ on it: http://online.wsj.com/news/articles/SB10001424052702303661404579175690690126298
ReplyDeleteYeah - I read that article, and lots of others -- but what's right? As I said, it's hard to tell exactly what impact it has because it's hard to know exactly what people are doing. But there's a big difference in my mind between reading some user-submitted reviews on Amazon and buying from the local shop (which I'm all for), and trying things out at the LBS and getting advice from the staff there, and then buying the thing from Amazon. Amazon (and other virtual retailers) don't pay for the reviews they post, and posting them costs the retailer almost nothing, while the LBS pays its staff and has much higher overhead costs (especially in comparison to the size of their market base) -- so they are far more vulnerable than the virtual retailers are to the reverse practice.
DeleteWe're all different in how we are motivated and how we shop. My mother was a real bargain-hunter and would drive all over town, using up (back then) $5 worth of gas to save $2 on groceries. Look at the way people line up to save a few cents per gallon on gas.
ReplyDeleteI'm not immune - I bought my most-expensive bike from an LBS, but at the end of the season when they had a sale. My wife also bought a new bike but from a hybrid retailer that has a chain of bike shops plus online sales. In both cases we wanted to see the physical goods first - then bought from that retailer. But their prices were very competitive.
But stuff like brakes or even groupsets? For one thing, LBSes don't actually sell much in the way of parts these days. "We can order it" is the usual response. (Have you seen the number of different disc brake pads there are?) That can mean available tomorrow to never, in my experience. Online is just way, way better as long as A) You know what you want and B) the online retailer actually has it in stock and has described it properly.
Retailing has changed and shops have to change with the times. The internet gives any with unique offerings (like all those old Campy parts) a huge new market to sell to. Shops can specialize (small s!) in more discrete and profitable segments, and still carry a core of products that satisfy local needs.
Your mention of shoes brings up an interesting truth for me - I have big feet (US14) so 90% of bike shops (or shoe stores) won't have anything that fits me, let alone a selection. Online, I find some shoes just aren't made that large (Asian and Italians seem unwilling to believe my feet can be that big :-) but there are plenty of choices - it's just that bricks & mortar stores don't want the risk of bringing in the 1% sizes in case they get stuck with them forever.
Yeah -- I don't have so much of a problem with buying items that aren't readily stocked by the local bike shop, especially if I know what I need/want, or if the price is just so much lower (like those 50% off sales through Nashbar). Where I get really bugged, and what I think crosses the line, is when people go to the bike shop to look at items, maybe compare, ask questions, and then go buy the thing somewhere else.
DeleteFor things like shoes, your situation is probably a bit different than it would be for most people -- so if you have to go online to find shoes that fit, then what other choice do you have? For most people, they should have no problem finding their size at an LBS -- and the way I see it, if they are trying on shoes at the LBS, and they find shoes they want to buy, then they should buy them there. It's a courtesy that should go both ways.