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Businesses The Almighty Buck The Internet

Retail Chains To Strike Back Against Online Vendors 532

Posted by Soulskill
from the eye-before-you-buy dept.
Hugh Pickens writes "Marissa Taylor says the retail chains' worst nightmare are consumers who come in to take a look at merchandise in-store, but use smartphone apps to shop for cheaper prices online. But now stores like low-end retail chain Target plan to fight 'showrooming' by scaling up their business models and asking vendors to create Target-exclusive products that can't be found online. 'The bottom line is that the more commoditized the product is, the more people are going to look for the cheapest price,' says Morningstar analyst Michael Keara. 'If there's a significant price difference [among retailers] and you're using it on a regular basis, you're going to go to Amazon.' Target recently sent an 'urgent' letter to vendors, asking them to 'create special products that would set it apart from competitors.' Target's letter insisted that it would not '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.' Target also announced that it had teamed up with a handful of unique specialty shops that will offer limited edition merchandise on a rotating basis within Target stores in hopes of creating an evolving shopping experience for customers. Target is 'exercising leverage over its vendors to achieve the same pricing that smaller, online-only retailers receive,' says Weinswig. 'This strategy would help Target compete with retailers like Amazon on like-for-like products.'"
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Retail Chains To Strike Back Against Online Vendors

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  • by Anonymous Coward on Monday January 30, 2012 @07:31PM (#38871177)

    This will work for a few weeks before people simply look up the equivalent part numbers. Sears tried this already. It sucked, made headaches, and didn't help the problem at all.

    • Yes, but... (Score:5, Interesting)

      by MrEricSir (398214) on Monday January 30, 2012 @08:00PM (#38871571) Homepage

      Look at Trader Joe's. Sure, you can buy all that stuff elsewhere but it's cheaper because it's a "house brand." If Target can do this, more power to 'em.

      This strategy doesn't have to suck as much as the Sears-branded Atari 2600 [wikipedia.org].

      • Hey! The Sears Tele-Games wasn't that bad, I had one of the 4 digital switch ones. It played all the 2600 games just fine back in the day. Really wasn't a fan of the controllers but normal 2600 controllers would plug in fine (and later the Sega Genesis/Mega Drive controllers).
      • Re:Yes, but... (Score:5, Interesting)

        by ackthpt (218170) on Monday January 30, 2012 @08:42PM (#38871957) Homepage Journal

        Look at Trader Joe's. Sure, you can buy all that stuff elsewhere but it's cheaper because it's a "house brand." If Target can do this, more power to 'em.

        This strategy doesn't have to suck as much as the Sears-branded Atari 2600 [wikipedia.org].

        Trader Joe's works because they are very focused on the quality of the goods from their suppliers - if the stuff gets too many complaints, it's gone and they look for a new supplier. I must spend half my food money at TJ's simply because the food and produce are always top-notch. If the big supermarket chains had the same attention to detail TJ's had there never would have been a TJ's.

      • Re:Yes, but... (Score:5, Interesting)

        by im_thatoneguy (819432) on Monday January 30, 2012 @08:59PM (#38872095)

        I was in Target yesterday looking for board games and I saw that they had an entire line of exclusive board-game SKUs.

        Unlike the standard boxes they were about 25% more but came in wooden boxes instead of cardboard. The target edition appeared to be a premium model.

        Seems like a smart move to me. I also bought a Galaxy Tab from Best Buy since they exclusively had the white model. I can say for certain I wouldn't have bought it from Best Buy for any other reason.

        In the case of Target I liked the option since they offered an exclusive product. In the case of Best Buy I just hated BB more since they were out of stock of all the accessories, nobody was helpful and the product differentiation was minimal.

        So my advice for retailers is to be careful.

      • by Dahamma (304068)

        Actually, Target has already done this for years (house brands and exclusives) with a bunch of products and it has worked pretty well for them so far (almost too well, sometimes - the whole Missoni [nytimes.com] thing was so popular it took down their website for a while).

        In general, their house brands for clothes and housewares are actually pretty decent, and a good deal... way better than Walmart's house branded crap. They definitely have a reputation as the quality leader among discount megastores...

    • by ackthpt (218170) on Monday January 30, 2012 @08:01PM (#38871573) Homepage Journal

      This will work for a few weeks before people simply look up the equivalent part numbers. Sears tried this already. It sucked, made headaches, and didn't help the problem at all.

      This was once the way Montgomery Ward, Sears, J.C. Penney and other stores operated. There were certain products you could only get with their brand name on it. Sure, other stores would have something similar but you went on the quality reputation of the store you saw it in. Also gives them a bit of a leg up against copy-cats.

      Down-side and reality-check: Most stuff is being made in China, Thailand, Vietname, Bangladesh, etc. so they're passing the 'savings' on to the buyer and the consumer as well, by selling to all comers, rather than just one chain of stores. Further, China has a rotten track-record of selling stuff out the back door - contract with a Chinese mill for 100,000 fuzzy pink sweaters and you can bet, once they've finished your order, since they're tooled up for this model, they'll be dumping another 50,000 out the back door to whoever wants to buy them, no questions asked.

      Best of luck to them with that.

      • by PRMan (959735) on Monday January 30, 2012 @09:04PM (#38872145)
        Maybe they could sell American-made products.
        • by mug funky (910186) on Monday January 30, 2012 @09:22PM (#38872365)

          it's quite telling that this was modded "funny"...

          unfortunately the skillbase is rapidly ensuring that local made stuff will have less quality and higher price than the "cheap and nasty" Chinese counterparts.

          it's a race to the bottom, and in most sectors, the bottom has been hit.

          now that manufacturing is all but dead, and the internet has made retail all but dead, what will everybody do now they've been obsoleted? they can't work a factory, they can't work retail, they can't afford to live without a job.

          well done, western world. we've all fucked ourselves.

          • by icebraining (1313345) on Monday January 30, 2012 @09:45PM (#38872643) Homepage

            now that manufacturing is all but dead

            It is?

            According to United Nations data, the U.S. is still the largest manufacturing country in the world. In 2009, American manufacturing output (in real terms) was nearly $2.2 trillion. That's about 45% larger than China's, at just under $1.5 trillion.

            Can China compete with American manufacturing [time.com]

            • by mug funky (910186) on Monday January 30, 2012 @10:53PM (#38873161)

              from the quoted article:
              "(For statistical reasons, I chose to use figures that include mining and utilities as part of manufacturing.)"

              i'd like to know those statistical reasons.

            • by artor3 (1344997) on Monday January 30, 2012 @10:53PM (#38873165)

              A more accurate statement is "manufacturing jobs are all but dead". The US's real manufacturing output (in inflation adjusted dollars) has doubled over the past thirty years, and aside from a temporary dip during the recession has been steadily rising. But the number of people employed in manufacturing has fallen by ~30% over the same period... and that's without accounting for the population increase!

              The problem with the "decline" of manufacturing is that American workers are crazy productive. We can produce all that we need with far less than full employment. This should be a good thing, but because of our idiotic love affair with the failed "trickle down" theory of economics, we end up punishing millions of people, not because they're unwilling to work, but because we simply don't need them to.

              If we could get over our fear that someone might get something for nothing, we could simply start giving everyone enough money to get by, with jobs being something people do to get ahead, not to survive. If we don't do it soon, increasing automation will force the issue within a few decades.

              • by SkimTony (245337) on Monday January 30, 2012 @11:19PM (#38873367)

                I think you're looking for this shirt:

                http://www.despair.com/madeinusa.html [despair.com]

              • by tlhIngan (30335) <(ten.frow) (ta) (todhsals)> on Tuesday January 31, 2012 @01:52AM (#38874279)

                The problem with the "decline" of manufacturing is that American workers are crazy productive. We can produce all that we need with far less than full employment. This should be a good thing, but because of our idiotic love affair with the failed "trickle down" theory of economics, we end up punishing millions of people, not because they're unwilling to work, but because we simply don't need them to.

                Well, the reason for that is because the American worker is EXPENSIVE. So if you're manufacturing in the US, you want to minimize your labour costs. So what you do is automate the hell out of your production line - design for manufacturing. You redesign parts so they can be put together with robots, you redesign circuitboards so there's fewer of them and fewer fussy connectors that have to be hand-inserted and hand-closed, etc.

                So the average American worker is damn productive because robots are doing 99% of the work, while he's doing the 1% that couldn't be automated reliably.

                Contrast this with China, where automation is very few (labour is cheaper than automation) so the only thing keeping you from making lots of fussy parts is it takes longer to build (== costs more people and takes longer to assemble). Speeding up your testing by 1 minute can save a ton of money in China as that worker saves 1 minute per device they test. For a robot, it doesn't matter too much.

                China's at the "labour intensive" part of industrialization - where goods require lots of manpower to manufacture. The US is at the "capital intensive" part of industrialization, where goods don't require much manpower, just a lot of seed money (robots are expensive, upfront designing for robots is more expensive in time and money, etc), but manufacturing requires very few people and is highly automated.

                Of course, Steve Jobs was also wrong in that you don't need 30,000 factory workers to make your product because you'd only need 1/10th of that or less as robots are doing all the work of the 30,000, and the fewer Americans are just overseeing the production line and minor assembly.

                Of course, the Chinese model is a bit more nimble in that a design change means re-teaching 30,000 people and a day to get back to full production. Reprogramming all the robots with the updated design and steps takes far longer (both in updating the designs and roles of each robot, and training each robot in its new role and then testing the final result), but with enough technicians (bit pricey) it can be done relatively quickly.

              • by houghi (78078)

                The problem with the "decline" of manufacturing is that American workers are crazy productive.

                Just like the European ones. And still it won't be enough because they are too expensive and we all want to buy at the lowest price.

                That means producing at the lowest price. Why should I care if some 10 Asian kids are less productive then 1 American grown-up? As long as they are cheaper in the end, the American grown-up will buy the product.

                Also a big part of this productive process is that a lot is automated. Just

            • Mega factories... one of them focuses on Coca-Cola. One canning factory in the US and a bottling plant in Italy. The canning factory is run by less then a dozen people who put out about 1 million cans per person during a shift. That is a LOT of manufacturing but not a lot of jobs. Somewhere a lot of money is being earned but this massive factory is not keeping an entire city fed through job creation.

              Meanwhile the Italian plant is very inefficient, far more workers in every shot... it still makes a profit an

    • by hairyfeet (841228) <bassbeast1968@@@gmail...com> on Monday January 30, 2012 @08:11PM (#38871677) Journal

      And the "store brands" will be shite on a crusty roll. look at the Best Buy "exclusive" computers, they are the lowest POS garbage that any OEM can scrape together, every part of them is crap from the caps to the plastic. it won't take long for people to realize the ones that can "only be found here" will be the junk piles, like those BB and Staples "exclusive" laptops where they stick some desktop CPU like a bottom of the line Celeron or Pentium in a cheap laptop and pass it off as a good deal.

      The best way is to not try to make funky store brands but to simply offer incentives to buy. When my oldest needed a laptop right that minute for class after the old Dell gave up the ghost he went to two local stores, the Staples and Best buy. The Staples were doing nothing but bait and switch, every model he would look at on the floor was magically out of stock but they could get him 'something similar' for a $300 markup, instead we went to the local BB and when they saw he was comparing prices the floor guy said "I'll throw in a bookbag and cleaning kit" and sealed the deal. Later when we checked online they sold it to him within $40 of the average price and the bookbag made up for the difference so we were happy.

      So you can still make the sale in retail, simply offer the customer a good deal. I went amazon for my netbook, not because i had something against the local shops, but all they had were Atom crap and i wanted an AMD, now i go into the local shops like Walmart and best buy and i see they have quite a lot of nice AMD Fusion based so if i needed another one I could be tempted if they throw in a little swag or offer a decent price. The local staples still sucks though, last time I went in there with a customer who wanted me there to help decide on some monitors for his business what did i see? same old bait and switch BS. I got so disgusted that even though the BB is 35 miles away i said 'Hop in my truck and we'll get you some monitors". treat the customer right they'll buy, try to screw 'em and watch those sales walk out the door, its really that simple. that customer spent nearly a grand on monitors that day and those sales COULD have been Staples if they wouldn't have tried to screw him. I can't bitch too much about their douchebag tactics though, the customer was so impressed i was trying to keep him from getting ripped off he bought an extra 22 inch and handed it to me for my trouble as well as threw $2000 worth of business my way building the machines for his office. So I guess i should thank Staples for being douches, it certainly made me look better by comparison.

      • by PeanutButterBreath (1224570) on Monday January 30, 2012 @08:40PM (#38871935)

        The best way is to not try to make funky store brands but to simply offer incentives to buy. When my oldest needed a laptop right that minute for class after the old Dell gave up the ghost he went to two local stores, the Staples and Best buy. The Staples were doing nothing but bait and switch, every model he would look at on the floor was magically out of stock but they could get him 'something similar' for a $300 markup, instead we went to the local BB and when they saw he was comparing prices the floor guy said "I'll throw in a bookbag and cleaning kit" and sealed the deal. Later when we checked online they sold it to him within $40 of the average price and the bookbag made up for the difference so we were happy.

        So in order to make the sale they had to match the on-line price while paying for all the overhead required to meet your "right that minute for class" criteria. How do you expect this to be sustainable?

        Or, lets suppose it is sustainable. Why do you tolerate on-line retailers charging the same price while offering less service?

        • by hairyfeet (841228) <bassbeast1968@@@gmail...com> on Monday January 30, 2012 @09:21PM (#38872361) Journal

          Oh please! Do you HONESTLY think they paid MSRP for either the laptop OR the bookbag? The cleaning kit was MAYBE $2, the bookbag MAYBE $8, and they probably made at least $40 on the laptop. So they made out just fine friend, it was the fact they were willing to offer SOMETHING, even if it was cheap, that helped to make the sale.

          And as someone who IS an actual retailer frankly its just good business. I often will pick up cheap keyboard mouse combos for less than $10 when newegg or Tiger is having a sale so when someone is looking at a tower I can say "Hey i'll throw in a new keyboard and optic mouse, no charge" and you'd be surprised how often that works. With laptops i use cheap 4-8Gb thumbsticks or if it has a card reader a cheap SDHC card. Does this hurt my bottom line? hell no, all it means is I'm making $50-$60 on the unit instead of $60-$70, big fricking whoop. but it makes the customer feel special to think they got "something extra" and that good feelings equal more business and they are more likely to send others your way.

          Its business 101 guy, you want to build a rapport with the customer and make them feel good about buying from you. Throwing in some cheap swag that we frankly didn't pay hardly anything for doesn't hurt our bottom line while making the customer more likely to give us repeat business and IT WORKS. My oldest has gone back to that same BB and bought a whole bunch of extras for that laptop, like USB speakers and a briefcase for when he doesn't need the bookbag, all kinds of little extras, why? Because they made him feel good about buying from them, that's why. Its such a simple thing and it amazes me so many businesses have forgotten that.

          Remember that $2000 sale i posted about earlier? Know how I got that account? The guy came in on a sat and was hurting because he needed to get some bookkeeping done by Mon and his PC crapped out on him. I yanked his drive and slapped it into one of my spares so he could get his data and showed him how to access it and told him "You just use this spare while I get the parts ordered for yours, that way you aren't gonna have any downtime" and that simple little act of making sure he wasn't jammed up not only got me his office, but the print shop down the street, a nice upgrade of the dorm at the local college, and three customers that have been steady buyers for nearly 2 years now, all because of treating one guy right and keeping him from hurting. he quickly spread the word about how well i treated him and the business rolled in. Hell i haven't even had business cards in over a year, I've had too much work to even need the things, and just word of mouth keeps me swamped most weeks. treat the customers right and they'll buy, simple as that.

          • by PeanutButterBreath (1224570) on Monday January 30, 2012 @09:44PM (#38872623)

            Oh please! Do you HONESTLY think they paid MSRP for either the laptop OR the bookbag? The cleaning kit was MAYBE $2, the bookbag MAYBE $8, and they probably made at least $40 on the laptop. So they made out just fine friend, it was the fact they were willing to offer SOMETHING, even if it was cheap, that helped to make the sale.

            Right. As opposed to Amazon who offered nothing to make the sale at the same effective price and couldn't even meet the "same day" requirement. Yet, Amazon is somehow viewed as the gold-standard of value for the price-conscious customer.

            My point is that either BB's model is unsustainable under your demands (i.e. forced to compete at prices that won't support their operating costs) or Amazon's prices are inflated (i.e. they are charging what it would cost to provide a local brick-n-mortar store service/support and pocketing the difference). Okay, maybe its a combination of the two.

      • by Lucidus (681639)

        I'm genuinely surprised, and faintly horrified, to find someone using Best Buy as an example of good retail practice. In the past few years they have been caught misrepresenting products, selling used products as new, setting up a fake website with inflated prices, and otherwise behaving like dishonest scum.

  • I do the opposite (Score:5, Insightful)

    by Anonymous Coward on Monday January 30, 2012 @07:32PM (#38871183)

    I do the opposite of what this article suggests. I'll look up reviews or whatever online, and instead of waiting around for shipping I go out and buy it. I've even done this with Target.

    If they stop carrying these products, then I will never be buying from them, since they'll have nothing I want to buy.

    • by zAPPzAPP (1207370) on Monday January 30, 2012 @07:34PM (#38871223)

      Every time I try to do this, the first 3-4 shops I visit don't have the item in stock.
      And of course none of them offers a list of their items online.

      • by firex726 (1188453) <firex726&yahoo,com> on Monday January 30, 2012 @07:43PM (#38871361)

        Just lookup the item # online and call ahead to the store. If they have it ask them to hold onto it upfront and head over. If they don't, find another location/store.

        • by rec9140 (732463) on Monday January 30, 2012 @07:56PM (#38871519) Homepage

          "Just lookup the item # online and call ahead to the store. If they have it as"

          Whoosssssshhhhhhh!

          The whole point is NOT to use the phone! Point click go pick up. Seriously the level of stock intergration systems in the 21st century utterly sucks!

          X store should be able to ACCURATELY tell me that widget 12345 is in stock in store 788 with 32 and its accurrate when I pulled it.

          I've seen this all to often from all sorts of stores offering pick it up now services...

          Then ... how can it be in stock in the store and be out of stock online? ? ? HMMM??? IT CAN NOT!

          The store should shove it in a box and UPS/USPS it to me! If the warehouse is out of stock and stock is in the store(s) then ship it to me! GO FETCH TIME! Hence why accurate stock systems need to be in place, and I seriously find it out of place that in 2012 this is not the norm.

          • Re:I do the opposite (Score:5, Interesting)

            by AngryDeuce (2205124) on Monday January 30, 2012 @08:12PM (#38871685)

            Oh, believe me, the internal systems know exactly what they have in inventory, how much is there, and how much they're expecting in future orders.

            Target especially, I know this from first hand experience, their internal systems track everything, they have an elaborate warehousing system that is updated constantly by warehouse personnel wielding LRT's (barcode scanners that tie into the inventory system) as they deal with overstock, as well as do replenishment pulls to keep the shelves stocked. You can also see what every store carries via their intranet for stock balancing purposes...they know what's coming on every trailer days before it gets there. It's all barcoded.

            It would probably be trivial for them to hook that system into their forward-facing website, but they don't want that. They'd rather you get in the car and drive down to the store and impulse buy a ton of crap you weren't actively looking for. That's pretty much every big-box retailer.

            Allowing people to get what they want and get out is the last thing they want, so outright telling you if they have something for sure via the web will likely not happen. Even if you can confirm it is there, good luck getting a hold on it so you can run over and pick it up.

            • Hence why I'll keep shopping at Amazon, which seems to be doing very well at letting me make the exact purchase that I need in the minimal amount of time.

        • by djdanlib (732853) on Monday January 30, 2012 @07:59PM (#38871545) Homepage

          As someone who worked in retail for 8 years, I agree with this. Retail employees would MUCH rather you called ahead. They will even call other stores to find it for you, if you ask. Otherwise, you'll show up and get angry with them, and their job sucks enough already. So yes, please do call ahead if you know exactly what you want. Press the 7 or 11 digits on your phone, it's not hard!

        • by Anne_Nonymous (313852) on Monday January 30, 2012 @08:00PM (#38871569) Homepage Journal

          Just as a warning, it turns out that Home Depot will not hold your caulk up front for any length of time.

    • by mrmeval (662166)

      Target already does this and has some excellent store branded foods. It's not perfect as some are damn near inedible crap. I'd say that so far I've had about 50/50 good/horrible on buying their store brands. I won't however pay 'too much' where that would be more than 10-20 percent which is about the most I've found there store brands to be priced.

      In other areas they could use some work, better quality and something better than I can get at other local stores or online. They're pretty bad when it comes to e

    • Re: (Score:3, Insightful)

      by BonemanPgh (2370264)
      Before buying a Kindle I actually wanted to use one to decide on the Touch, Keyboard, or Standard edition. Buying via Amazon has a 30 day return policy, free shipping both ways so it would be zero risk to buy one through them. Every retailer has the same exact price on them. Disclaimer - I worked in retail sales at a place very much like Best Buy 20 years ago. I started out at Best Buy, units were on a ultra-sensitive anti-theft cable that triggered three times while I was looking. All units on a demo l
  • They'll just make a nearly-identical, but corner-cut model?

    That's about what the folks in Bentonville push to their stores - where you don't know until you call for support.

    • by Rinisari (521266)

      All it takes is another SKU. Stores that do price matching do it by SKU, right? So, by each store having their own SKU, no one has to match. Moreover, adding a store-specific SKU adds another layer to any ShopSavvy or Amazon PriceCheck style apps that look up prices across multiple stores by SKU. Those apps will have to find some kind of "master product" and identify all of the SKUs associated with it and ensure that the end-user understands the differences.

  • I don't visit Target for anything. Instead, I lurk forums and post appropriate questions as necessary.

    No need to spend precious gas money and time to drive to brick-and-mortar stores.

  • by Anonymous Coward on Monday January 30, 2012 @07:32PM (#38871193)

    At least they're not trying to legislate their way out of it.

  • Ok so your going to drive to the store, find the product you want, scan it on amazon, save really nothing since you already wasted the time and gas, wait a week for it to ship and then if you dont like it pay to ship it back, wait another week etc

    and with amazon charging sales tax now and in the near future is it really worth it?

    • Depends on the price diff.

      A 10-15% diff in price would be worth the the time and gas.

      YMMV.

    • by hairyfeet (841228) <bassbeast1968@@@gmail...com> on Monday January 30, 2012 @08:43PM (#38871961) Journal

      Depends on the product as some stores will really assrape you on price for what should be a common as dirt product. Take 100 packs of blank DVDs, its not like they have an expiration date, DVD burners are as common as dirt and on every new PC and laptop, so WTF? I walk into Wally World and they want $48! I walk into staples and its $46! I can grab the Amazon brand for less than $20 or Verbatim for $25 or so, and frankly i've not had any trouble out of the Amazon store brand.

      So at least for certain items I've found the B&M stores aren't even close. thumbsticks, any kind of memory card, blanks, DVD burners, basic bog standard stuff that you wouldn't think they would gouge like a Monster Cable on they very much do. If it was only a couple of bucks more i wouldn't care, taxes or no, but i'm not paying double just to get it now, thanks ever so. Hell the local Walmart wanted $19.99 for a lousy 4Gb thumbstick! Give me a fricking break! That's 4 times the price the same stick is going for on newegg, what are they nuts?

  • Right.... (Score:5, Insightful)

    by _LORAX_ (4790) on Monday January 30, 2012 @07:34PM (#38871219) Homepage

    Don't bother adding *real* value, just make it harder for the consumer in the long run. This will end well.

    • Re:Right.... (Score:5, Insightful)

      by vux984 (928602) on Monday January 30, 2012 @07:53PM (#38871479)

      Don't bother adding *real* value

      I'm curious what "real value" you suggest they add?

      The local bookstore has a coffee shop, lets you preview the books in comfy chairs, has kiosks to let you see what's in stock and where in the store it is, a whole bunch of staff, a club/rewards card...

      And its pretty busy too.

      But half the people i know, walk in browse around, look it up on amazon on their smart phone, and if they can get it a dollar cheaper online will walk out without making a book purchase.

      I think they've realistically done everything they can, short of simply matching amazon's prices. But that's not a value add, and a race to the bottom is a losing proposition for the retail world... amazon can lower prices more than a store in can. So they'll be out of business before they can win.

      • by Grishnakh (216268)

        I think they've realistically done everything they can, short of simply matching amazon's prices. But that's not a value add, and a race to the bottom is a losing proposition for the retail world

        Well, that's what happens when you're selling commodities. What else did you expect? You want to command higher prices, then you need to sell exclusive products that can't be found anywhere else. You're not going to get that with anything that's mass-produced in China.

        The local bookstore has a coffee shop

        It's alw

  • by Anonymous Coward on Monday January 30, 2012 @07:34PM (#38871221)

    I always thought they were too upscale for close-out shoppers like me.

  • by jodo (209027) on Monday January 30, 2012 @07:35PM (#38871237)

    The problem with Target-exclusive products is there will be no way to read reviews as there will be essentially none online. And I don't buy anything of substance without researching it.

  • by TheGratefulNet (143330) on Monday January 30, 2012 @07:39PM (#38871291)

    anyone who has shopped for a mattress in the US knows that the brands have all colluded (the S-brands; funny how the 'sleep' companies insist their names also start with an S) to change their model names from store to store!

    some stores are willing to help you decode the names into equivalent model names in their stores; but usually its a fixed game against you, the consumer.

    so, target and others want to play the mattress game?

    you know, when you declare war on your own customers, it may backfire. just saying...

    get wise, retailers. don't pull this shit, please! decades of this mattress syndrome has made mattress shopping as frustrating as used car shopping, and about as unpleasant. you want that image stuck to YOUR products and 'show rooms'?

    re-think this, guys. I'm pretty sure you don't really want what this will get you.

  • by asdf7890 (1518587) on Monday January 30, 2012 @07:39PM (#38871293)
    This has been done in the UK for some time, though for slightly different reasons. Having exactly the same product aside from it having a different model name/number used to be something a couple of camera manufacturers used to do for Dixons/Currys/PCWorld. It meant that price-match offers could be very generous (Found it cheaper elsewhere? We'll refund three times the difference!), because they would never need to pay out as no one else carried that exact model (well, they did, but with a different label) except those three stores which always had it at the same price as they are all owned by the same parent group.
  • Luddites (Score:5, Insightful)

    by Tablizer (95088) on Monday January 30, 2012 @07:39PM (#38871299) Homepage Journal

    Instead of fight against "lookers", embrace them. Who cares how the sale is made: if having a store improves online sales, that's a good thing. And, have the stores shift into a service center instead of just a physical catalog. A physical presence to demonstrate features first-hand and help trouble-shoot on-the-spot is sorely lacking online.

    Change with the times, guys. Sure, you'll have to shuffle around your business model a bit, but the sooner you embrace the new model instead of fight it, the better.

    • Re:Luddites (Score:4, Interesting)

      by avandesande (143899) on Monday January 30, 2012 @07:52PM (#38871465) Journal

      I would think that their worst nightmare is nobody coming to their store at all. Consumers are an impulsive bunch and I think the group of people that are willing to wait a week(s) and deal with package delivery to save sales tax is actually pretty small- and then what about impulse buys of other items they see in the store?

      I call bull on this one.

    • by reemul (1554) on Monday January 30, 2012 @08:03PM (#38871597)

      I'm with you - the one idea that the big box stores absolutely refuse to contemplate is competing based on _service_ instead of _price_. Most of them already used low prices to kill off the local small stores that provided real service to the shopper and community, now that they're getting creamed by Amazon they suddenly are all about supporting the local store.

      You want to be the "local" store, Mr. Big Box Chain? Try some actual service. Stores that make sense, staff that understands the product and wishes to help rather than just upsell warranty packages, "sale" prices that are actually below the normal price that I need less than 2 seconds to find with my phone. Some products I really want to be able to touch and examine with my Mark 1 eyeball, which I just can't do online. Or ask questions in real time, with the product in front of me. Make that happen, make the experience pleasant, and I'll buy from the physical store over the online store if the prices are even close.

      Too often I go into a place like Best Buy absolutely intending to buy a specific thing and fail. The stores are laid out to some layout designed to make you walk past as many impulse purchase racks as possible, rather than getting you right to the thing you actually want to buy. The staff isn't judged on whether they are helpful or even friendly - their metrics are all about sales, without teaching them any skills at interaction that might make sales happen. The item might not be in the place it should be, but good luck finding a minion to check the system for where it is, or whether it is out of stock. Forget service, try to go to Best Buy and not get angry.

      As long as the brick and mortar guys lose on both sales and service to the online retailers, they're inevitably going to die, unmourned. I acknowledge that they probably can't win on price. How about, just for giggles, trying service, just once?

      • by ediron2 (246908) on Monday January 30, 2012 @08:26PM (#38871805) Journal
        Actually, customers largely refuse to buy based on service. Among the service-is-king tier, there's room in the market for Neiman Marcus and... uh... well, that's it. Everyone else that tries, regrets the move. It's like newspapers blocking access to content behind a paywall. Everyone has to try eventually, and each time it fails: consumers race toward the bottom on cost far faster and more forcefully than they pay attention to quality and service. I don't like this, but it's a dominant rule of market economics. Incidentally, the same market economics are behind America's jobs *sprinting* to China. The example I've been watching most recently is the Raspberry Pi team's decision that they can't afford to manufacture in the UK as they'd hoped. Time and costs were too much to overcome.
        • by frinkster (149158)

          Actually, customers largely refuse to buy based on service. Among the service-is-king tier, there's room in the market for Neiman Marcus and... uh... well, that's it. Everyone else that tries, regrets the move.

          You completely forgot the one that actually does it the best - Nordstrom. And they do online sales right as well. If you order something online it is shipped from the closest B & M store that has it in stock. No separate supply chain or distribution system - it is one company. Free shipping, free returns, etc.

          They also bring out exclusive products - during their half-yearly sale for whichever gender you are shopping for. Except again, they do it right. For example, during the men's sale, you can a

  • Reviews (Score:5, Insightful)

    by Hatta (162192) on Monday January 30, 2012 @07:40PM (#38871307) Journal

    If I can't find any reviews for products on independent sites, I won't buy them. So if Target only carries custom products, I'm a lot less likely to find a review for that product. That means I won't be shopping at Target.

    At this point, the only reason for B&M stores to exist is for time critical situations when you can't wait a day or two to get your item off the internet. There's no way they're going to be able to compete with the internet on price. Compete on convenience and charge for it. Yes, it will be a smaller market, but that's progress.

  • by Mr. Foogle (253554) <(moc.liamg) (ta) (rabnud.nairb)> on Monday January 30, 2012 @07:40PM (#38871317) Homepage

    "Marissa Taylor says the retail chains' worst nightmare are consumers who come in to take a look at merchandise in-store, but use smartphone apps to shop for cheaper prices online.

    This is no different from how I shop for groceries: look at the ads in the Sunday paper, find the coupons, shop for X and one store, Y at another, Z at the third.

    Welcome to the 21st century. Get used to it, Target.

  • by jmichaelg (148257) on Monday January 30, 2012 @07:40PM (#38871319) Journal

    Costco already beats online retailers with three strategies:

    1) It sells extras with the package that are not included with the regular offering. My roomba came with extra room markers and extra filters.
    2) When the first two roombas I purchased crapped out, Costco exchanged them no questions asked. I had to try three units before I got one that worked reliably. Had I bought from Amazon, I would have had to pay to return the units and that's assuming they would have accepted them back.
    3) Costco prices goods very aggressively.so they're usually around the same price as what's offered online.

  • by PeanutButterBreath (1224570) on Monday January 30, 2012 @07:41PM (#38871335)

    Way too much effort involved in sorting through all the buying options. E.g. I would use a new digital camera, but I can't be bothered sorting through a zillion camera models and retailers. I still have a decrepit dumb phone for the same reason.

    I don't get any satisfaction from navigating the maze of hassle thrown up by retailers these days.

    • "The paradox of choice" - I too have buyer's paralysis. I make a database of overy known option, mark them 'deleted' one by one, and eventually come up with at least 20 alternatives which would be as good as any other. Typically there will be features I don't know I want until I start using it.

      And that's when I realized I could go to the library and read up using Consumer Reports and be done with it. It's well worth it, if you buy a major appliance every year (tv one year, bed, replacement microwave, com

  • by Anonymous Coward on Monday January 30, 2012 @07:43PM (#38871355)

    So, let's see...I drive 25 miles (each way) to Best Buy to try out a gizmo. The price at Best Buy is $250, the price at Amazon is $235.

    It's not worth $15 to me to wait, especially as I've already committed to drive 50 miles. So I tell the sales droid to grab one for me.

    Turns out that they don't actually have it in stock, but offer to order it for in-store pickup next weekend. For $250.

    At that point I click the order button at Amazon on my cell phone, and it's at my house in mid-week. For $235.

    You lost a sale, Best Buy. This has happened multiple times. Ever since Circuit City went under, Best Buy has down way downhill.

    Amazon didn't kill you. You killed yourself.

  • by hawguy (1600213) on Monday January 30, 2012 @07:43PM (#38871357)

    A retailer's worst nightmare isn't people that come into their stores and comparison shop online while they are surrounded by in-store advertising and are subject to impulse purchases. Their worst nightmare is people like me that usually choose to research and shop online without ever setting foot in the store.

    If Target starts selling a bunch of house-brand crap that I can't research online, I'll be even less likely to buy something there. Unless it's cheap stuff like cleaning supplies, but I usually just buy the store brand of stuff like that anyway.

  • by VinylRecords (1292374) on Monday January 30, 2012 @07:44PM (#38871373)

    This really isn't that difficult. If someone is coming into your store and won't buy from you because they can get it elsewhere for cheaper then simply match the price. Either that or throw in some extras like a free upgrade or accessory if they purchase the item in question.

    I would always go into Best Buy and look through their enormous DVD library. The shop near me had literally hundreds of foreign films and shows in stock all in region 1 including a gigantic aisle of only anime films and shows. I'd show up, take note of what looked good, and then go online and find them for literally 50-80% off in brand new sealed boxes.

    One time I wanted to buy a DVD and said that if they matched the online price of another retailer that I would buy it. They declined and I ended up buying it online later that day.

    It's really not that hard for consumers who have a choice. You might occasionally need the convenience of immediate purchase at retail. But most of the time people can wait to order consume electronics or entertainment media. So they'll sacrifice immediacy in order to save money.

  • guilty (Score:2, Interesting)

    by Anonymous Coward

    I just did this last weekend looking for a new keyboard and webcam. I went into a local chain store, found the products I was looking for after picking them up and reading the boxes, scanned their barcodes with my android app, and found them online (amazon) for almost half the price with free shipping.

    As a consumer I am simply making the best purchasing decision possible. This provides me the advantage of actually holding the product first before I make my buying decision, BUT that buying decision will be

  • by nomad63 (686331) on Monday January 30, 2012 @07:47PM (#38871409)
    Has anyone else seen Isaac Mizrahi collection of women's wear anywhere else ? Or Mossimo brand of anything for that matter ? This is like google's privacy policy bruhaha. They are just making it public. And for the prices they sell the cheap Chinese knock off apparel, I'd rather go to Wallyworld and buy the 25-30% cheaper. They may not carry the same brand but who cares as long as they are going to fall apart in 2 washes, no matter what ? For other things like consumables, or tools or electronics for that matter, good luck to target to get manufacturers to make distinct enough products so that they can not be found elsewhere but I'd bet my pennies to your dollar, savvy shoppers are able to cut the crud and put a damper to this approach. Does it matter 1080P TV set with 1000:1 contrast ration to carry a different brand and barcode, compared to its equivalent sold in Amazon, as long as you know both are coming from the Foxcon slave camp in China ? I sure don't...
  • by monkeyhybrid (1677192) on Monday January 30, 2012 @07:49PM (#38871427)
    At least here in the UK, the main PC / electronics retailers already have their own SKUs for essentially the same product available elsewhere. Only last week when browsing netbooks at my local Comet / PC World / Currys, I found several models of interest that I could find no information online for. I got chatting to one of the sales assistants about this and he admitted the main stores all do this now to combat customers going elsewhere. He also said it's very useful for them avoiding having to fulfill their price match guarantees because although the product may be identical elsewhere, it's a different SKU on their books.
    • They do it in North America as well. For instance, with TVs, Best Buy / Futureshop, Walmart, Costco, and sometimes others have special models. Costco models are actually noticeably different sometimes (fewer ports, other corners cut), but otherwise they usually differ only in the model number and maybe extremely minor differences to keep it on the up-and-up.

  • Mattress Shopping (Score:5, Informative)

    by Tokolosh (1256448) on Monday January 30, 2012 @07:54PM (#38871493)

    This has been going on for years in the mattress industry. Identical products are sold under different labels, with huge markups. So there is an incentive to confound comparison shopping. They don't care about customer satisfaction or loyalty, because a mattress is not a frequent purchase.

  • by EmagGeek (574360) <gterich@aoMONETl.com minus painter> on Monday January 30, 2012 @07:54PM (#38871495) Journal

    ME: "Hey, do you have an XYZ Widget Plus in stock?"

    Them: "No, that's not a normal stock item, but I can order one for you and have it here in a week for $250"

    ME: "I can order it from Amazon Prime and have it here TOMORROW for $215, sorry."

    The ONLY reason to go into a brick and mortar store is if you absolutely have to have it right now. Brick and Mortar did not adapt to the advent of online shopping. It's their fault. They needed to realize that they could no longer sell commoditized items. They would have to offer some REASON to pay MORE in a store. Without a significant value add, there's no reason to even set foot in a store anymore.

    • Re: (Score:3, Informative)

      by jpwilliams (2430348)

      The ONLY reason to go into a brick and mortar store is if you absolutely have to have it right now.

      Big stores like Target, I totally agree. But for lots of specialty items (bikes, quality shoes, quality clothing), a brick-and-mortar can still offer expert assistance to keep customers. Sure, you can buy all those things online, and mine the collective opinions, but a seasoned sales professional can help you pick out what's right for you, not what the masses rank the highest. Unfortunately, I don't see that value-add model working for anything in Target, or even Best Buy, who's sales team, in my opinion,

  • by afabbro (33948) on Monday January 30, 2012 @08:07PM (#38871639) Homepage

    There are two Targets near me, and I live in a major US suburban area. Outside either, cell phone reception (Verizon) is excellent. Ten feet inside the store, it drops to one bar and by the time you get very much further, it's NO SERVICE. It is generally impossible to call out or in to a cell phone in Target, or even to send SMS. It has been that way for at least three years, and my wife (who's lived in this part of town longer) says it's been that way as long as she can remember. Other friends say the same thing.

    I'm sure Target doesn't have cell phone jammers installed - that would be illegal. But I wonder if they've designed their buildings to be cell-signal-unfriendly? I can imagine it has all sorts of benefits - employees can't covertly text while on duty, and shoppers can't price-compare on the Internet.

    I have no proof...just my anecdotal experience.

    There is a large Wal-mart supercenter near us, and my Verizon cell works fine throughout, only losing a bar or two in the middle of the store, which is several times the size of Target.

    • by oodaloop (1229816)
      My AT+T phone and my Verizon phone have worked fine in the Targets nearest me. I've talked on the phone and looked up prices throughout the store on multiple occasions.
  • by devleopard (317515) on Monday January 30, 2012 @08:25PM (#38871801) Homepage

    They're not going to stop this. A limited number of products that people comparison shop for can be made in store-specific versions (will there be a Target-only version of Madden?)

    Why not embrace it, and partner with Amazon? They could even do a location-based search agreement.

    They should push their advantages, which is not the product. They don't make Playstations or hair dryers, so to try to make your product your competitive advantage will always fail. They should push their sales focus to things that can't be comparison shopped easily (clothes, food, low cost items). Emphasize the time element (not a Target item, but I frequently buy computer and technology products at retail that I could easily save money at NewEgg on). Take the emotional approach: Make people feel guilty about not paying sales tax that benefits their state and municipality, and point out that buying local = jobs. Focus on ease of returns, and try to make that process easier. Emphasize services. Tell delivery horror stories. Etc, etc... I'm sure any or all of these can be argued down, but the bottom line is, a brick-and-mortar has competitive advantages, but they're not the product they're reselling, and it's not price.

  • by C_Kode (102755) on Monday January 30, 2012 @08:37PM (#38871921) Journal

    I remember stores had their own model number for name brand products. For instance, Packard Bell computers. Several stores would sell the same exact computer, but they would have different model numbers. The reason they did this is so stores like Sears and whoever else was selling it, could say "Lowest price guaranteed!".

    When you show them another Packard Bell (or whatever) with the same exact parts (HD, ram, cpu, case styling, etc) for a cheaper price. They would say, "Sorry, that is a different model."

  • by dbc (135354) on Monday January 30, 2012 @08:37PM (#38871923)

    Target sells the Neato XV-12 robotic vacuum. The only differences between the XV-12 and the XV-11 that everyone else sells are:
    a) It is called XV-12, not XV-11
    b) the case plastics are white.

    *yawn*

    I don't see how this helps anything. It is well known they they are identical in every way except the color of the plastic. How does Target expect to get any strategic advantage out of this?

    • by b4dc0d3r (1268512)

      An ignorant consumer is the opposite of a free market. Or another way, a truly free market depends on informed consumers. Either way, I don't know what the hell a Neato XV-12 is or why I would want one. The fact that you know this offhand is extremely unusual. Well known to whom?

      Target is explicitly depending on keeping people ignorant of such things, and unless they go out of their way to learn, or someone makes an app to do just that, this will work. Until it pisses people off, of course, when it bec

  • by robbak (775424) on Monday January 30, 2012 @09:49PM (#38872679) Homepage

    I agree fully with the between-the-lines message here: like Big Content, the bricks-and-mortar-store's business model is finished. They need a new one. I can see two: One is that the manufactures should start paying B&M stores to market their products. It already happens in supermarkets: Coke pays supermarkets huge amounts to get those end-of-isle promotion spots, and the same happens on the ordinary shelves: If you don't pay, you'll end up with 6 inches near the ceiling or by your feet. Those 12 feet of John West Tuna cans you see at eye level? John West paid for that. Quite a bit, too.

    The second is travelling road-shows. Outside of major cities, we will have Samsung or Hewlett Packard sending out a fitted-out semi with displays, listening rooms, and well-clued-up salespersons, all set up to allow customers to touch and see their products. They'll have a headline act like a huge 3D screen showing a recent release film or something - flavour of the circus here - and all ready to take your order with fast shipping if something takes your fancy, or give you a mouse mat with their online store's address.

    Will B&M adapt, or try to stop the world instead? Only one of those options will work, and it doesn't involve 'earth-moving equipment'.

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