Strategy and Structure Responses to "SHowrooming"
Showrooming is the practice of shoppers examining merchandise in a traditional bricks and mortar store, then searching and buying online, often at reduced price. A store in Australia went so far last year as to change its customers $5 just to get inside the premises in an effort to forestall the practice. Further, a 2013 study by Anderson Robbins Research found that 67% of shoppers utilize their smartphones to see if there is a better price to be had elsewhere. Their work also found that a solid majority (62%) would leave the store and buy elsewhere for a 20% differential; 13 percent would buy elsewhere for any price differential. Companies can expect those numbers to climb unless steps are taken to mitigate the impact.
So what can organizations do to thwart the threat of this practice? Thanks to free shipping and easy returns (and, until recently, no taxes) the practice has flourished. It has been argued that BEst Buy (some have dubbed them the Amazon showroom) and Walmart are the two stores most targeted by showrooming. However, the concept is not just aimed at large big box retailers as small businesses are at risk as well. SO what is a company to do? The ability to select an appropriate strategy and match it with the appropriate structure is an important characteristic of effective strategic leadership. Your challenge in this assignment is to research the strategy and structure efforts underway at a firm level analysis. In particular the assignment requires you to:
1. Identify a firm that you suspect is a target os showrooming. You may identify a top retailer or other firm you think influential in this arena. You do not have to pick a large publicly held corporation; a small business you are familiar with that is impacted is a good choice as well.
2. Showrooming has really become influential in the last few years. Describe how your firm has changed during this time in terms of structure and strategy.
3. Summarize how these efforts are, or are not, paying off.