Furniture Sales in the Age of “Showrooming”

Target is among the retailers taking steps to thwart shoppers armed with Smartphones who are scanning bar codes on products in store to search for better prices in competing stores and on the internet. Target is understandably upset about sales the 1,700-store company is losing every day to showrooming, the scanning of price tags by Smartphone-wielding shoppers who are searching for lower prices online or in competing stores.

Target hasn’t publicly stated its losses to the practice that’s also known as “scan and scram,” but company officials signal their irritation with lost sales in a letter to suppliers in January. The letter sought help from suppliers in curbing showrooming after released a Smartphone app called PriceCheck in December that makes it even easier for shoppers to seek out the online retailer’s price on an item the customer is scanning in a store.

In published reports, including the Wall Street Journal piece on showrooming in January, analysts say the practice is costly to store-based retailers, because online merchants have lower costs and often don’t charge customers sales tax. While online stores account for only 8 percent of total retail sales, that number is up from 2 percent in 2000.

Suppliers are being asked to enable Target to match the prices of its online competitors. According to the Wall Street Journal article, Target is also asking suppliers to create unique products that can only be purchased in Target stores, helping avoid direct comparisons to online goods.

To give an indication of the seriousness of the problem, a survey of bookstore customers in late 2011 found that 28 percent of shoppers had browsed for certain titles in a store before going online to compare the store prices to those in online stores.

Of course, furniture stores aren’t immune to showrooming. In a growing number of markets, furniture chains are selling to local customers via the Web, which makes it easy for shoppers to compare prices and availability, even when they’re inside a rival store with a Smartphone.

As the number of Smartphone users continues to grow, furniture retailers face a growing challenge from showrooming. In addition to the prospect of losing sales to rivals on your sales floor, there’s also the possibility of shoppers canceling orders before delivery, after comparing your price on a given SKU to rival stores.

Preventing showrooming requires a holistic approach that extends from the actual price tags you use to the merchandise you select and how it’s displayed in your store. Some strategies to consider are as follows:

Follow the example of Target by asking your suppliers to develop special products for your store, with one-of-a-kind names and stock numbers.

Consider adding more private label merchandise. Also, if you’re carrying private label merchandise, pay attention to whether any other retailer in your market is offering furniture with the same brand name, or a very similar name. If so, your supplier or your store may need to market that furniture under a different name.

Set up displays in your store that help illustrate how the furniture you carry is different from inferior-but-similar-looking merchandise available at national chain stores. Create a display that contrasts a solid wood table from products made with veneers. Display a cutaway of a sofa or chair to show customers the interior components. Give your sales staff tools and opportunities to discuss the construction of inferior products.

Offer room packages of carefully coordinated pieces at a good value, or consider a gift-with-purchase option that enables a customer to, as an example, select a free lamp or area rug when purchasing a sofa and chair combination.

Create in-store room vignettes with pieces from a variety of manufacturers to emphasize that your store offers design expertise and style that other stores can’t replicate, and that customers can’t create on their own.

If you’re a retailer, and you have ideas on how our industry can tackle this product, please share your thoughts with us.