Industry Voices: The Art of the Possible
Supply based economics is alive and well. That’s why I strongly believe that retail should drop the term “showrooming” and replace it with price-roaming, which is essentially shopping, something consumers have been doing since day one.
Every retailer dealt with price-roaming long before consumers started carrying smartphones and using them for whatever reason on the sales floor. But with today’s transparent pricing and ubiquitous lowest price, retailers who compete for a consumer with the same class of product and same SKU need to offer their most aggressive and competitive prices. Buyers are smart. They are informed and price sensitive. They have immediate access to a variety of important opinions and social platforms that deliver price equality. Consumers not only want a fair price, they want the best price.
Let’s take a look at how Kohl’s handles price-roaming. Throughout its stores, the retailer uses electronic price tags. Based on whatever reason arises—competitive pressures, new opportunities, increasing the average ticket, etc.—Kohl’s can change pricing for each SKU on demand. Kohl’s has leveraged price-roaming to its advantage, instead of constantly fretting about what to do about showrooming.
To understand and take advantage of showrooming is to understand that the consumer is constantly seeking and demanding an equal purchasing playing field in-store and through the big buying cloud in the sky. Bravo to Kohl’s for leveraging a very consumer-centric approach to sales and for practicing P&L smarts. All brick-and-mortar retailers can execute the same change-agent process as a way to compete, drive traffic, and grow sales and profits. Speed to price parity is now Kohl’s weapon of choice in their retail environment, just like Amazon practices in the cloud.
Kohl’s effort to deliver competitively matched pricing has had an immediate and positive impact on its business. The retailer recently announced plans to hire 52,700 seasonal workers this year, a 10 percent jump from last year. It also plans to hire an average of 41 full-time workers per store, a four percent increase from last year. The company also plans to hire 5,700 seasonal employees at its distribution centers and another 30 seasonal positions in credit operations.
Peter Weedfald is the Senior Vice President of Sales and Marketing for Sharp Home Electronics Company of America (SHCA). He has also served as President of Gen One Ventures, SVP, Chief Marketing Officer of Circuit City, SVP of Sales and Marketing in North America for Samsung, and SVP of global marketing and EEVP, GM & Chief Marketing Officer for ViewSonic.