When Neshalett Moulton shops, the Boston resident remains loyal to one thing above all: the lowest price.
The 25-year-old doesn’t hesitate to whip out her smartphone mid-aisle to track down a more attractive deal on whatever she’s searching for — whether it’s a stick of deodorant or a TV — at other shops and online merchants.
But this holiday season, so-called brick-and-mortar retailers are working harder to get Moulton’s business once she steps through their doors. For the first time, major chains such as Best Buy and Target are matching prices with Amazon and other online sellers. Timberland and Yankee Candle are using new technology to send consumers mobile coupons on their phones when they enter stores. And Walmart is testing same-day delivery in select cities to make low-cost buying more convenient.
“I embarrass my friends because every time I venture into stores I’ll scan prices and see if I can get a better price,” said Moulton, who plans to stick to her comparison shopping regimen on Black Friday, no matter how good the in-store deals look. “It’s really important to me because every penny counts.”
The direct appeal to online consumers amounts to an about-face for traditional retailers who have put up little fight against Amazon. The world’s largest Internet merchant has encouraged shoppers to browse — or “showroom” — in stores, and then buy online through phones, tablets, or other devices. Last year, Amazon launched a free Price Check app that allows users to scan product bar codes in stores and immediately see the cheapest price for the same merchandise on Amazon. To promote the app during the holidays, Amazon offered customers up to $5 off any product they scanned in a store.
‘I always play the matching game. It’s the first thingI ask after I settle on the productI want.’
Several studies report showrooming is on the rise. This season, about 1 in 5 US adults is expected to do it, a 134 percent increase from 2011, according to IDC Retail Insights, a Framingham market research firm. Traditional stores have realized they need to adapt to the changing consumer landscape and capitalize on technology that has made holiday business more competitive, retail analysts say.
“Everyone with a smartphone has their online world on call. Retailers can’t fight that. Retailers have to embrace and enable it,” said IDC’s Greg Girard. “Beyond fundamentals like relevant assortments, optimal prices, and knowledgeable trusted employees, success lies in extending mobile technologies — smartphone apps and mobile websites — into stores. . . . Savvy retailers are doing this.”
Yankee Candle, based in South Deerfield, is using a new iPhone app to send promotions to consumers when they walk near one of the company’s shops. The app — already used by more than 300 merchants — was created by RetailMeNot, a leading coupon website that is now featuring deals for mall shoppers. It relies on a technology called geo-fencing, which uses a phone’s location data to send audible and visual alerts about particular stores to an iPhone’s main screen. For example, shoppers near Yankee Candle stores this weekend will receive a notification for this RetailMeNot exclusive — “Buy 2, Get 2 Free on All Large Jar candles, Tumbler Candles & Large Radiance Vases.”
“If we’ve gotten [shoppers] into one of our stores, that’s half the battle or more,” said Brad Wolansky, Yankee Candle’s chief marketing officer. “It’s our responsibility, through our great product, communication, and things like smartphones, to attract their attention and do what’s necessary to close the sale.”
Many consumers still prefer the instant gratification of in-store shopping, so small incentives can often make the difference between browsing and buying, according to Brian Hoyt, a RetailMeNot spokesman. The company’s app has been downloaded more than a million times since it was launched in June and in-store coupons distributed through it are being redeemed at a higher rate than discounts accessed through RetailMeNot’s website.
“If retailers can serve up a deal to the consumer, the likelihood that they can combat showrooming is that much stronger,” Hoyt said.
Merchants are not just counting on prices to give them an edge over online competitors. Best Buy, for example, is also focusing on promoting specialty items. This year, the electronics chain is more than doubling the amount of exclusive computer-related merchandise in its stores. The company has increased employee training and expanded its “never out of stock” promise to include best-selling smartphones, not just the value-priced ones it concentrated on last holiday season. That may help, but for shoppers like Bill Leak of Plymouth, Best Buy’s willingness to match Internet rivals on pricing is what gets their attention
“I always play the matching game. It’s the first thing I ask after I settle on the product I want,” said Leak, 55, who recently succeeded in getting Sears to match Walmart’s online price for a Hoover vacuum — a $50 difference. “It shows an effort on their part to accommodate a customer for a long-term relationship and improve their brand.”
That kind of bartering isn’t feasible for many smaller shops. Todd Zigelbaum, president of Town Line Wallpaper and Paint in Malden,has tried to combat showrooming for years by covering up the names of manufacturers on catalogs in his store and whiting out design numbers in sample books that consumers borrow, so they can’t look them up online. Zigelbaum figures that over the past decade he has lost close to $1 million in sales to websites.
This year, Zigelbaum is taking a bold position by cutting ties with wallpaper brands that sell online. He sent letters to manufacturers earlier this month informing them of his new policy to only carry wallpaper that’s exclusive to brick-and-mortar stores.
“Turning our store into a showroom for online competitors is an expensive way to go out of business,” Zigelbaum wrote. “We will no longer be part of the destruction of this industry.”
If retailers such as Best Buy and Target don’t find ways around the showrooming phenomenon, Zigelbaum said, their stores won’t survive.
Target, the Minnesota discount chain, has stepped up efforts to allow customers to shop whenever they want from any location. In addition to matching prices for the first time with online competitors, Target this year has installed more extensive wireless networks in stores to provide free Wi-Fi coverage so customers can easily access the Target app to redeem mobile coupons. For shoe-buying, shoppers can scan QR codes — the small squares with black-and-white patterns used on products and in advertising — to locate alternate sizes or colors in another Target store or find them on Target.com.
Consumers can now also shop directly from Target’s holiday television commercials, bus shelter ads, and catalog pages by scanning a QR code or sending a text to a number listed in the ads. The text generates links to Target’s website, where the advertised products can be purchased.
“We know many consumers like to peruse items in a store before purchasing them online,” said Erin Conroy, a Target spokeswoman. “We’re infusing technology into our in-store experience to give our guests the ease of online and mobile, combined with everything they love about shopping in a Target store — something no online-only retailer can match.”