In recent news it has been reported that Target Corp. is asking its suppliers for help in combating ‘showrooming’ – described as when a shopper visits the retail establishment to check out a product and then ends up buying it for less money from an online shopping site.
In a letter to its vendors, the company asked for them to create special proprietary products for it to sell that would make it at least harder for shoppers to compare pricing. In the letter, Target CEO Gregg Steinhafel says:
“What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands.”
The hope, apparently, is to make comparison shopping for everything from electronics to homewares as difficult as it is for mattresses (which, by the way, is among my least favorite things to have to shop for).
Here are 5 reasons why this strategy, at best, won’t work and, and worst, will backfire in a significant way:
- It is Anti-Transparency. This strategy bucks most of what has become the new reality of the shopping experience. With the rise of the web and then social media, the consumer (and people in general) have come to expect transparency as a cost of entry in their world. They respect those who are open and honest and suspect those who are not. This strategy is the complete opposite of transparency. It seeks to hide information and muddy the waters rather than make it more accessible and more clear. This breeds distrust, and all the bad things that go along with it.
- It Ignores the Consumer’s Need of Choice Validation. You can’t put the rabbit back in the hat and you can’t turn back the clock. Today’s consumer has become accustomed to the strength that easily accessible information provides. It has permeated the very DNA of how they make decisions. At the heart of this is price comparison and, even more important, product ratings. A product that has thousands of positive ratings online is inherently more attractive to one with just a few. By splintering the product-verse into proprietary versions and models, you upset the wisdom of the crowd. This means that when someone is shopping for an item in Target, and that product is unique to Target, they will not be able to ease their natural fears of making the wrong decision by reading the experiences of scores of others. Given the choice, consumers will gravitate towards the tried and true – and likely the model that has 1,500 reviews on Amazon.
- This strategy is in defiance of the Target Brand Promise. From Target.com’s Our Mission page: “Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less brand promise.” By not allowing price comparison, how can one believe the Pay Less bit? It seems hypocritical to focus your mission on price and yet not allow consumers to evaluate that price vs. competition.
- It Ignores the Elephant in the Room. Let’s face it, online retailing is not going away anytime soon. And the biggest of the online retailers, Amazon.com, has organized itself so that it has other businesses that are designed to offset the low margins it makes on its online retailing. To succeed as a brick and mortar business in retailing mass market items, there must be value added above price alone. Hiding price will not make this go away – on the contrary, it will likely make things worse. It would be wiser to focus energy on differentiating the shopping experience, re-emphasizing the style and design that is at the heart of the Target brand and finding other ways to encourage the in person shopping experience.
It is particularly odd to see a company that has prided itself on its forward-thinking and innovation to invest itself so heavily in trying to construct obstacles to consumer progress. I suspect that some vendors will comply, but, in the long run, Target will backtrack on this now very public error in judgement.