A big threat to Target: Shoppers with smartphones

Smartphones, you’re killing Target, apparently.

It’s becoming an increasing practice that people patrol brick-and-mortar stores, check the prices, see the cheaper price online, and order it via their phone. This is reducing the stores to little more than showrooms for an online store.

Target, the Wall St. Journal reports, wants to stop it, and has sent a letter to vendors with a plea for products that can’t be found online, or lower prices to compete:


“What we aren’t willing to do is 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,” according to the letter, which was signed by Target Chief Executive Gregg Steinhafel and Kathee Tesija, Target’s executive vice president of merchandising.

Showrooming is an increasing problem for chains ranging from Best Buy Co. to Barnes & Noble Inc., at the same time that it’s a boon for Amazon.com Inc. and other online retailers. This year store sales overall edged up 4.1% during the holiday shopping season, while online sales jumped 15%. And while online sales represent only 8% of total sales, that is up from just 2% in 2000.

Some analysts in the story say Target won’t succeed since it’s using an old business model to compete with online sites that have reinvented the game.

  • Any brick and mortar store that you can buy its product online is going to have this problem.

    Bookstores, Electronics stores, camera stores…

  • BenCh

    Wouldn’t it be easier just to offer “exclusive” type products? You could have a different bar code which when scanned, wouldn’t bring up any matches online. I am not sure on the rules or use of bar-codes, but seems like it could “help.”

  • Bonnie

    Well, I am guilty, I do practically all of my shopping on line now, largely with Amazon.com

    With free two day shipping, even the smallest thing, like a pair of socks or window cleaner or whatever just shows up at your door. I am working on reconciling my carbon footprint, what with the UPS trucks and all the packaging involved.

    Target is not competitive on line, nor is their customer service or website ease of use anywhere near amazon’s. Amazon is in constant touch with you on your orders, Target is a confusing communications maze.

    Except for things I can get at small local retailers…which are more specialty items in general, with the exception of food and the local hardware store.

    I don’t know how brick and mortar retailers are going to figure this out, it will be interesting to see.

  • John P.

    I don’t think there is an answer for the brick and mortar stores.

    If online retailers can sell at a lower cost, then the more efficient business model will prevail in the long run.

    There will be room for some things like men’s suits that need tailoring, for instance. Some customers just like the immediate gratification of taking it home. Some really need their widget right now.

    I think we are seeing the beginning of a permanent downsizing in brick and mortar retailing.

  • Joanne

    I think Target is trying to solve the wrong problem. Yes, I do almost all my shopping on line – but I don’t go to Target , or any other bricks and mortar stores, to “kick the tires”. They just don’t have enough merchandise to be my starting point. I start by doing a web search on, say, sandals. Or refrigerators. I read the customer reviews (awesome), then buy with almost no risk. Most sites offer free shipping. Many also have free returns. And they let you return even seasonal merchandise, unlike Target. I will go to Target if I need something in a hurry. Groceries, make up, something for a trip tomorrow are examples. But the limited merchandise, lack of reviews and soulless return policy has taken the fun out of bricks and mortar. Try to beat Amazon’s or Zappos customer service. I’m actually willing to pay more online. I can find things I won’t see at my Target.

  • Joanne

    I think Target is trying to solve the wrong problem. Yes, I do almost all my shopping on line – but I don’t go to Target , or any other bricks and mortar stores, to “kick the tires”. They just don’t have enough merchandise to be my starting point. I start by doing a web search on, say, sandals. Or refrigerators. I read the customer reviews (awesome), then buy with almost no risk. Most sites offer free shipping. Many also have free returns. And they let you return even seasonal merchandise, unlike Target. I will go to Target if I need something in a hurry. Groceries, make up, something for a trip tomorrow are examples. But the limited merchandise, lack of reviews and soulless return policy has taken the fun out of bricks and mortar. Try to beat Amazon’s or Zappos customer service. I’m actually willing to pay more online. I can find things I won’t see at my Target.

  • Matt

    Wow Target is full of themselves! They think they’re a showroom for Amazon? Hardly. Let’s say I wanted to buy some kitchen gear. Would I rather go to Target and try out their 4 or 5 different varieties (2-3 of which are probably pathetically cheap plastic) or would I rather read hundreds of reviews on Amazon’s selection of dozens or hundreds of one type of product? If anything Amazon has *too* much information to digest, but they do a good job of making it easy to filter through products. And it shows up two days later no matter what it is. And I can get credit card points AND hawaiian airlines points for every dollar spent. So just like Bonnie I do most of my shopping on Amazon now. Target, get over yourself.

  • Justin H

    I shop at Target and Amazon. Amazon isn’t always cheaper than Target, so it can be a little hard to compare. (For instance, the cereal I eat is much cheaper at Target, and I’ve noticed bar soap is too.)

    I fully admit to using Amazon’s price check app when in Target and other stores. Sometimes you’re looking at buying something for $59.99 and think that there’s no way it’s worth $59.99. The price check app helps you find that Amazon sells the same item for $27.10, shipped to your door. Target has always had competition, now it has just been further enabled by technology.

    One area where Target should be hitting Amazon is on sales taxes. Right now it is a nice benefit to not have to pay sales tax on amazon stuff. You’re supposed to, but who does? Target has a legitimate beef with unfair competition on this.

  • Joanna

    I use Amazon to do my product comparison, and then I go spend my money in a brick-and-mortar store. If it’s owned by someone who lives in town, even better.

  • David J

    I would agree with everyone’s sediments. I think the “showroom” argument is pretty weak for Target. Best Buy is in a far worse position than Target. With Best Buy practically everything they sell is something I would buy online for cheaper, and none of which I need immediately. The exception to this might be cable/adapter, but I would need to be pretty desperate to pay the 500%+ premium.

    Target at least has competitive prices with Amazon on some items, and sells many items that I need in a pinch. Exclusives aren’t going to do anything for items (that I) typically in-store price check. Really? An exclusive version of a laundry hamper? Probably not.