Executive Briefings

Target Seeks a Little Help from Its Supplier Friends in Dealing with 'Showrooming'

The nightmare that has, of late, had retailers waking up in a cold sweat goes something like this: They spend millions to build and staff stores, fill them with great merchandise, and advertise to get customers in the door. The customers come in, browse and find something they like - which they promptly purchase from a low-cost online competitor via their mobile device.

"Showrooming" has struck fear and/or anger into the hearts of many brick-and-mortar retailers since mobility became a potent force. Now Target is explicitly seeking help from its suppliers to combat this phenomenon. In a letter sent earlier this month and signed by CEO Gregg Steinhafel and EVP of merchandising Kathee Tesija, Target asked suppliers to create special products that would set it apart from competitors, or if that wasn't possible, to help the retailer match rivals' lower prices.

"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," said the letter.

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The nightmare that has, of late, had retailers waking up in a cold sweat goes something like this: They spend millions to build and staff stores, fill them with great merchandise, and advertise to get customers in the door. The customers come in, browse and find something they like - which they promptly purchase from a low-cost online competitor via their mobile device.

"Showrooming" has struck fear and/or anger into the hearts of many brick-and-mortar retailers since mobility became a potent force. Now Target is explicitly seeking help from its suppliers to combat this phenomenon. In a letter sent earlier this month and signed by CEO Gregg Steinhafel and EVP of merchandising Kathee Tesija, Target asked suppliers to create special products that would set it apart from competitors, or if that wasn't possible, to help the retailer match rivals' lower prices.

"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," said the letter.

Read Full Article