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.