Will Google Kill the Big Box Store?
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  • Clever, clever, Google. I’m sure that Amazon and Alibaba are paying close attention to this development as well.

    An interesting challenge that’s being created by the rise of online merchants is the practice of “showrooming,” whereby people will visit their local retail store to *examine* their prospective purchases, and then go home to actually *purchase* them from a competing web-only vendor that can offer them deeper discounts because it doesn’t have to pay the cost of operating brick-and-mortar stores. Best Buy is being particularly hard-hit by this phenomenon, because big-ticket items like computer systems and home theaters are things that consumers are reluctant to buy without getting a good look at first, but are also expensive enough to make it worthwhile to shop for them twice (once in person and once online) in search of a discount.

    One possible solution to this practice is for stores to charge customers a small fee just to walk in the door, which is treated as a credit against their purchase price if they should happen to actually buy something. That policy is predictably controversial, and so far it hasn’t exactly been greeted with cheers from happy consumers, but it could well be the future of retail.

    Another answer is the one that Apple came up with: a seamless monopoly on how their products are manufactured and sold. Nobody *has* to buy their Apple products from an Apple store, but nobody’s selling them for substantially less; and no matter who you buy them from, unless the devices fell off the back of a truck, Apple makes its money. That might also be the future of retail. In the electronics sector, Sony already has proprietary retail stores, and in other areas of the economy, like clothing, stores like Bannana Republic and The Gap have been using this business model for decades.

    A third possibility is that retail stores could simply opt to include online vendors in their price-matching guarantees, which would eliminate the need for customers to make their actual purchases elsewhere. . . but it would also cut deeply into the profit margins of stores that are already in trouble.

    • Regret doing that showrooming thing to my local Borders. I just won’t pay top dollar for an ordered reprint when I can usually get the same thing on Amazon for $0.01 plus postage. Setting aside for a moment the fact that Borders’ HQ were clueless about the book business, I felt really bad when my local store folded – I enjoyed the people who worked there and the big expansive accommodations for just sitting and sampling. I never did showrooming with Best Buy but just don’t patronize the place anyway because it is so dark and gloomy in the stores. The need a different décor that makes it more inviting, or at least less depressing, to shop there.

  • Seems to me that grocery service has not fared well in the internet age. The concept never appealed to me because I have lived in witheringly hot climates where I was almost guaranteed never to be home when the delivery people wanted to deliver. If every vendor was staffed on the delivery side 24/7, that would be one thing. But most vendors don’t have delivery at 2 AM.

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