By Tim Feran
Black Friday used to mark the unofficial start of the holiday shopping season. But intense competition for consumer dollars and a trend called “showrooming” have diminished the importance of Black Friday, pushing retailers to offer deals earlier and more often.
Showrooming essentially is comparison-shopping in a store, checking out merchandise in person, and then using a smartphone or tablet to compare prices with those offered online.
The practice has given retailers fits and e-tailers big profits, but most importantly, it has put consumers back in the driver’s seat.
Determined not to lose sales, chains such as Best Buy, Target, Toys R Us and Wal-Mart are offering price-matching, either online or in-store, and often before Black Friday even begins.
Office Depot, for example, will begin offering Black Friday sale items online at 7 a.m. on Thanksgiving, then begin offering the same items in its retail stores at 5 a.m. on Friday.
Kohl’s will offer Black Friday sale items online at Kohls.com even earlier, on Wednesday, and in stores starting at midnight on Thursday. “Consumers are smarter this year,” said Matt Wilson, who follows retailing at SBC Advertising in Columbus. They know “that earlier shopping in the year will net better values.”
“The whole phenomenon is consumer-led,” said Christopher Barcelona, executive creative director at online marketing firm Resource Interactive. “Retailers have to embrace it.”
In the past, showrooming has been particularly big on Black Friday, a day when 70 percent of shoppers say they venture out to look for low prices above all else, reports online-shopping site PriceGrabber.com.
But more people have started shopping early this year, according to the National Retail Federation, which reports that 52.8 percent of consumers said they had started shopping, up from 51.4 percent at the same time last year.
And 55.3 percent of people who own smartphones or tablets plan to use them for holiday shopping.
So bricks-and-mortar retailers have rolled out the deals earlier.
“Retailers now have to have a compelling reason for people to buy at the store. Price is going to be table stakes,” said Ed Bentley, who leads the Ohio retail practice at accounting firm Deloitte & Touche. “You’ve opened up more opportunities for people to acquire what they want. They don’t have to settle for what’s down the street from them.”
Even higher-end retailer Macy’s has jumped into the fray, offering a new Black Friday feature on its mobile app. Using the app, customers already are able to view Black Friday specials on their mobile devices, create personal shopping lists and receive messages about previously unadvertised specials, including some specific to their local store.
However, this year’s online comparison shopping might not yield as many surprise bargains as in the past, particularly in the area of consumer electronics.
Although both Best Buy and Target have announced price-matching strategies this year to combat online retailers, they are being helped because some manufacturers have moved toward a practice called unilateral pricing policy, which penalizes retailers — online or in-store — for selling an item below the manufacturer’s preset price.
This means, according to a report by NPD Group, that the lowest price of items such as televisions is becoming fixed in the same way that the prices of Apple products don’t vary, regardless of whether they are sold at an Apple store, online or at another retailer.
Bricks-and-mortar retailers can’t afford to rest, despite this year’s tweaks to their marketing strategies.
The war between online and in-store retailers is far from over. “I don’t think we’re at the end of it by any stretch of the imagination,” said Resource Interactive’s Barcelona. “Amazon is trying to get to same-day shipping, for instance.”
In addition, he said, “Amazon is getting smart in the day-to-day goods arena. If something can be delivered on time, when I need it, and it’s all free shipping,” consumers will respond.
In-store retailers, for their part, are beginning to find that showrooming doesn’t have to be the enemy.
“In a new Deloitte survey,” Wilson said, “use of smartphones in a store actually increases the likelihood of that customer purchasing the item at that store — roughly half of consumers surveyed said that the use of the smartphone for comparison influenced their decision for the store, not against.”
Once in the store, Bentley said, “retailers have to be able to say, ‘Here’s why you should buy here — it’s in stock, it has a service warranty,’ all those other things that make it a more-convenient shopping experience.”
Because both online and in-store sales have room to grow, the showrooming trend probably will continue for the foreseeable future — and customers will continue to be the winner.
“We’re still in the infancy of selling on the web,” Bentley said. “I think there’s much more growth opportunities. I still think there’s a social aspect of shopping, an aspect that won’t go away, because you want to touch and feel and see and have a live person to talk to. I still think there’s room to grow in both markets.”