Friday, October 12, 2012

Shop-rooming: how online shops benefit from brick-and-mortar retailers' infrastructure

Joe Ronning, CEO and founder of Digital River, delivered  a keynote speech at the Company’s annual Globalocity commerce conference (http://www.youtube.com/watch?v=SsZovEjJpko ). Among other interesting things he mentioned a “show-rooming” phenomenon where the brick & mortar stores of traditional retailer serve as a showroom for an online retailer. Shoppers go to brick-and-mortar retailers' stores to "touch and feel" the product they want to buy and then purchase the item from an online retailer. Here is how e-shops parasite on traditional retailers' infrustructure. 

Put yourself in the traditional retailers' shoes: you build a chain store, invest in equipment and inventory, train sales staff and so on. And here comes online shop and takes your customers away making your chain a mere show-room. Do you want to be in this business letting other to parasite on your business? I certainly do not.   
 

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