Businesses Reflect on the Showroom Effect

by Luke Jones  on Monday, Oct. 8, 2012 12:00 am  

Brick and mortar shops increasingly are becoming victims of the "showroom effect," where shoppers use apps like RedLaser, Google Shopper and Amazon's own Price Check to scan barcodes and compare prices to online retail giants, then leave and make the purchase online.

"It happens quite a bit," said Robert Coon, who represents the Alliance for Main Street Fairness in Arkansas. "Retailers see it happen whether a person is asking questions or whether they pull out their iPhone app and scan the barcode. It's tough for retailers to deal with. They're entrepreneurs, taking risks, investing capital into their business. For people to come in and use them, then move onto something else, that's a hard thing to embrace."

David Cockcroft, treasurer for Wordsworth Books & Co. in Little Rock, said he'd heard of the trend, but hadn't observed it himself.

"I haven't seen people come in with smartphones," he said. "They might come in, browse for a book, then go home and look it up on Amazon, which is fine. We used to have people who'd take something off of Amazon and say, 'Please order this for me.' I guess it goes both ways."

Cockcroft said small bookstores like Wordsworth don't always compete with the big retailers, but recently Wordsworth joined the American Booksellers Association to lobby with other members in favor of online sales tax collection.

Meanwhile, the bookstore is working on an Internet store.

"It will have the convenience of people able to check inventory online 24 hours a day, and if they see the book they want, they can order it," he said. "We have no illusions that we are going to be a force on the Internet. We at least want to have something available to customers to find out what we do have available."

Some businesses are too specialized to have experienced the showroom effect - like Cottage Caboodle in Eureka Springs, for example, which sells home decor and gifts.

"Our customers are not terribly tech-savvy," said owner Linda McFarlin. "People who come to Eureka Springs are more in the older demographic."

The phenomenon is experienced more by shops with a younger audience, McFarlin said.

Beth Guest, owner of Showcase Trophy & Awards in Rogers, said she'd seen customers take pictures of her products, but she wasn't sure if it was for online comparison or simply to take back and show the team.

To compete with online stores, Guest said, "we have the best product, we feel, for the best price that we can possibly offer."

And she's totally in favor of online sales tax enforcement.

"I think it would help level the playing field," she said. "The shipping that customers have to pay doesn't make it even. We have to pay the shipping price for our products to come in."



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