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Andrea Woroch on Retail Wars

Thursday Oct 18 2012

While the presidential candidates compete for votes, there's another heated rivalry occurring between online and offline retailers. E-retailers and brick-and-mortar stores are campaigning for consumer dollars by one-upping each other in offers, promotions and overall value. Read on for seven trends poised to dominate the headlines and the holiday season.

1. Showrooming
Showrooming may not be recognizable to consumers by name, but both online and offline retailers are intimately familiar with the term. It refers to the practice of shopping for an item in-store, only to return home and purchase the item online for a lower price. Consumers are increasingly turning to their mobile devices to shop online for a product while viewing it in-store. Best Buy is the most recognized victim of this trend as online electronics providers continue to eat away at their revenues.

2. Same-Day Shipping
Amazon and eBay revealed their plans earlier this year to experiment with same-day shipping offers, hoping to take even bigger bites out of brick-and-mortar revenues. Wal-Mart recently announced similar plans as they endeavor to bite back at online retailers' growing popularity. Though appealing, experts agree the high cost of this service coupled with it's limited availability will hinder the promotion's ability to compete with everyone's favorite deal: free shipping.

3. Free Shipping
Though free shipping is not a new trend, it continues to be a big factor in e-retail sales and strategies. In 2011, over 50 percent of online orders were cancelled due to lack of free shipping. In fact, the lowest shopping cart abandonment rate in 2011 occurred on Free Shipping Day, the popular online shopping holiday offering free shipping with delivery by Christmas Eve from thousands of retailers. This year's event is scheduled for Monday, Dec. 17.

4. Online Price Matching
To combat the showrooming phenomenon, Target plans to match prices with online competitors, including Amazon and Walmart.com, between Nov 1. and Dec. 16. This campaign is a bold move for the popular retailer, as most brick-and-mortar stores avoid price-matching with low-cost, big-volume online retailers. Best Buy announced similar price-matching plans for the holiday season, an aggressive move for the struggling retailer.

5. Layaway Fee Waiving
Over Labor Day this year — before anyone wanted to think about holiday shopping — Toys 'R Us announced its plan to waive layaway fees during the holiday season. Shortly thereafter, Kmart and Sears decided to waive their layaway fees, and Walmart returned to it's original $5 fee after customers complained about the company's plan to increase the fee to $15. Ultimately, layaway has seen a comeback in recent years as the recession forces consumers to seek alternative ways to afford holiday expenses.

6. Brand Collaborations
Designer collaborations with department stores have exploded over the past few years, as budget fashionistas clamour for low-price alternatives to their favorite threads. In addition to the much-anticipated partnership between Target and Neiman Marcus, Costco and Sam's Club are also welcoming new designers to their clothing departments in time for the holiday season. According to Business Insider, strong sales of clothing helped Costco increase third-quarter earnings by 21 percent this year.

7. Digital Gift Cards
Gift cards have topped holiday wish lists for five years in a row, according to the National Retail Federation. The purchase of plastic gift cards peaks in early December since they usually take up to five days to deliver. Dec. 12 was the magic day in 2011, but digital gift cards allow procrastinating shoppers a last-minute option. According to Internet Retailer, 26.7 percent of all digital gift card sales in December last year occurred between Dec. 21 and Dec. 24.

Feel free to share "Target Matches Online Prices & Other Holiday Shopping Trends" with your audience, giving proper attribution to the source.

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Andrea Woroch is a nationally-recognized consumer and money-saving expert who helps consumers live on less without radically changing their lifestyles. From smart spending tips to personal finance advice, Andrea transforms everyday consumers into savvy shoppers. She has been featured among top news outlets such as Good Morning America, NBC's Today, MSNBC, New York Times, Kiplinger Personal Finance, CNNMoney and many more. You can follow her on Twitter for daily savings advice and tips.

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3 responses to “Andrea Woroch on Retail Wars”

  1. Zachary Kelley Avatar
    Zachary Kelley

    The price-match with online retailers will not work. The brick and mortor stores will not make enough profit to maintain operations. They should instead be pushing the customer service aspect that brick and mortor is known for such as tech support, warranties, and trained associates.

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  2. Dennis Elam Avatar
    Dennis Elam

    Zach
    I suspect you are right, add in the cost of gasoline and time and people will still buy on line as they are saving gasoline and time.

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  3. Ruben Medrano, Sr. Avatar
    Ruben Medrano, Sr.

    If they perhaps deploy a program we are unfamiliar with than it can work. I was working for HEB when eBay got its start and I remember finding clearance merchandise from when stores did mandatory resets that had disco’s (discontinued), seasonal merchandise no longer in season, overstock, etc. going for more than store retail on eBay. Not just from HEB but stores that have locations all ver the country. I do not know if people realize just exactly how and why merchandise is voluntarily discounted, discontinued, or how mass merchandise is purchased. There is more room for profit than u can believe and shipping from a store is really a no brainier; they already have transportation systems in place that run internally, the general public just never hears about it. That same system can run deliveries if they needed to. Logistically it is a no brainer. Even a few years back HEB had home delivery programs all over that we’re quite successful for what they did and involved.
    I bring this up because while employed there, there was a team quietly looking at doing what Walmart is going to do…we were way ahead of our time. Believe me, brick and mortar is a visible and viable entity that can have many more potential opportunities. If Walmart is doing what I think they are doing, you will see some other different programs by Christmas time and some after.
    The concept is hard to believe or even understand with how we view current operations. Take this idea to bed with you: What exactly does a store encompass? When a company states “a store” know that internal transfers are accomplished by a push of a button and so merchandise does not have to be in one physical location to quailfy as in-store. Regionally merchandise can leave a location within minutes of an order placed and on its way to a physical address with the help of store-to-store transfer and delivery systems. And one final thought: how do you think your prescriptions get from a warehouse unit to a store the next day, time and time again? Remember print photography? How do you think orders made it to central processing and back, even transferred to misrouted stores? One day if someone asks I will be happy to tell them about when I delivered merchandise from an HEB to a customers house the same day they purchased. It was on the way anyway as internal systems are already in place.

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