ISSUE NO. 68 07/25/12

The war against showrooming continues with a handful of brick-and-mortar retailers stepping up their efforts to lure online shoppers into their offline locations. Walmart, Macy's, Best Buy, Sears and the Container Store are adding new services that try to come close to the convenience of online shopping, including pickup locations, drive-thru customer service centers for online sales, free shipping outlets, payment booths and Web return centers.

In addition, they are trying to play up the benefits of shopping offline, like paying cash for purchases. For example, Walmart now allows shoppers to order products online and pay with cash when they pick them up at a physical store. This allows the retailer to appeal to those who don't have credit cards or bank accounts as well as those who prefer not to pay for things online because they are uncomfortable with providing financial information on the Internet. According to the New York Times, the "order online/pay with cash" option accounts for 2% of Walmart's sales.

Same-day delivery returns and sales are another benefit of brick-and-mortar retailers like Sears, which has started a drive-thru returns/exchange service. By providing a mobile phone receipt or printout, shoppers can do the exchange with a sales clerk right outside the store. The Container Store, which is also offering a drive-thru service, is finding that online orders intended for in-store pickup tend to be much larger than typical in-store orders, John Thrailkill, a vice president of stores for the Container Store told the Times.
In the meantime, online retailers are fighting for market share as well. Some, like Blue Nile and eBags, which are part of the ShopRunner service, are shipping to physical locations like Toys"R"Us. Others may open their own offline stores. "You will definitely start to see online-only players open stores," noted Alison Jatlow Levy, a retail consultant at Kurt Salmon.

"We are living in the age of the customer, and you can either fight these trends that are happening — showrooming is one — or you can embrace them," said Joel Anderson, the chief executive of for the United States. "We have a lot of assets, but they're only assets if you embrace the trends of the customers."

As shoppers are faced with more options than ever, the competition for their attention and dollars is intensifying. Online and offline retailers are both making their play for more of the pie by adopting services that make them more like their counterparts, effectively blurring the line between them. Manufacturers have the chance to help retailers stand out by bringing customized offers and programs tailored to individual retailers. Especially valuable may be the opportunity to help demonstrate the benefits of the in-store experience. So, while developing programs for sell-in, make it a part of your standard practice to help differentiate the offline from the online, or vice-versa.

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"Luring Online Shoppers Offline," The New York Times, 7/4/12

Sears, showrooming, The Container Store, Walmart

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