Payback time begins in Canada

SPRING 2013
How likely are you to shop at TARGET
once its stores open in your community?
2.%
1.7%
2.%
22.0%
52.0%
Payback time begins in Canada
I
t is still chilly throughout Canada, but Target
can count on a warm reception as its nationwide rollout begins this month in Toronto.
Exclusive Target Supplier News research
conducted by Field Agent, a market research
firm and provider of in-store service, shows
the retailer’s prospects for success are quite
high owing to tremendous awareness, strong
purchase intent and willingness to abandon
some familiar competitors.
Nearly 93% of the 300 Field Agent respondents who participated in the survey said they
were aware that Target was opening in Canada,
and more than half said they were “very happy”
Are you aware that TARGET
stores are opening this March
in Canada?
7.3%
92.7%
Yes
1
No
the company was opening stores. In addition,
more than half also said they would definitely
shop at Target once stores opened in their
communities. In fact, 71% of respondents said
they had already shopped at a Target store in
the United States.
Those are compelling figures for a company
with high expectation for a market entry that
involves 124 store openings in a single year,
more than the company has ever opened in
the United States. during a comparable period.
The first stores have already opened in the Toronto area, and by the end of April a total of 24
units will be open. The remaining 100 stores
will open in four waves over the remainder of
the year with Target eventually expecting its
Canadian operations to generate revenue of
$6 billion.
Target is off to a good start and enters
the markets with some tailwinds. Canadian
familiarity with U.S. retailers overall and cross
border shopping behaviors are well known.
However, Target Supplier News wanted to gain
deeper insight into Canadians’ awareness
level of Target, specifically purchase intent,
emotional connection to the brand and the
competitive impact that will result from the
addition of 125 new Target stores in a single
year. Accordingly, a key element of the survey
examined which retailers would bear the brunt
of Target’s unprecedented incursion.
20.3%
Definitely will
Not likely
Very likely
Definitely won’t
Somewhat likely
Unsure
Are you happy that TARGET is opening
in Canada?
1.7%
0.3%
28.3%
51.0%
18.7%
Very happy
Somewhat happy
Neutral
Somewhat unhappy
Very unhappy
Continued on page 3
We target your success
™
Every store.
Every week.
We understand stores. All we do is Target merchandising and nobody does it better.
We are in every Target store every week in the U.S. and Canada providing
comprehensive retail services including:
• Planogram Audits and Maintenance
• Item Corrections
• Instant Rebate Coupons (IRCs)
• Merchant Initiated Returns (MIRs)
• Count Updates
• And Much, Much More
To learn how you can achieve success with our total store expertise, Target-focused training, and
dedicated field structure, contact Chris today at 1-800-777-3767 or [email protected].
www.rmservicing.com
www.rmservicing.com • 800-777-3767 • [email protected]
Continued from page 1
Have you ever shopped at a
TARGET stores in the United
States?
29.3%
70.7%
Yes
No
Walmart will be tested most by
Target’s entry
Target enjoys high awareness and strong
purchase intent among Canadians, and that
could spell trouble for Walmart, according to
Field Agents who shared their views in the Target
Supplier News survey. Target this year will transform more than 10 million square feet of selling
space to a higher and better use than what
Zellers offered shoppers, and many are likely to
alter their behavior as a result.
Not that Canadians don’t love their Walmart.
Twenty-five percent of respondents said it was
their favorite place to shop—more than any
other retailer and well ahead of second ranked
Costco at 15.3%. Likewise, when asked where
they would go shopping if they had an extra
$100 to spend, Walmart was the preferred destination for 15.7% of respondents, second only to
Best Buy at 21.7%.
In addition, Walmart stands out as the nation’s
clear low price leader, singled out by nearly half
of those who wrote in the retailer’s name on an
open-ended question. No other retailer was even
close, with the Lob’s law limited assortment
No Frills food concept mentioned by 12% of
respondents.
When asked directly about whether Walmart
was the nation’s low price leader, an overwhelming 80% of respondents agreed with the
statement. Walmart also ranked the highest,
beating out Costco, when Canadians were
asked which retailer offered the best value,
defined as the combination of low price and
product quality.
3
So why should Walmart be worried
about Target? For starters, many of those
surveyed indicated they plan to change their
behavior and expect others will as well. For
example, nearly 60% of those surveyed said
they would shop less at Walmart once Target
opens. No other retailer will feel as great an
impact. Shoppers Drug Mart was the second
most frequently mentioned company with 15%
of respondents indicating they would shop at
the drug chain less after Target opens.
When the issue was probed in a slightly
different manner by asking respondents which
three retailers would be most affected by Target’s arrival Walmart fared even worse. It was
mentioned by 88% of respondents, followed
by 33% for Loblaw’s Real Canadian Superstore
concept, 32% for Sears, 22% for Canadian
Tire and 20% for Shoppers Drug Mart. To
probe the Target vs. Walmart issue further,
respondents were directly asked about their
purchase frequency at Walmart once Target
opens. Nearly 13% said they would shop much
less at Walmart and 47% said somewhat less.
A larger group, 36%, said their behavior would
remain the same.
Which retailer is your favorite
place to shop?
15.3%
17%
48.7%
8%
6.3%
4.7%
3%
3%
3.7%
Costco
Best Buy
Real Canadian Superstore
Canadian Tire
Loblaws
Future Shop
Chapters Indigo
6.7%
4.3%
4.3%
Walmart
No Frills
Dollarama
Costco
Other
Real Canadian
Food Basics
FreshCo
Which retailer provides the best
value (combination of product
quality and value)?
16.7%
10.3%
28%
7%
5.3%
Other
Zehrs
9.7%
9%
7.7%
25%
No Frills
12%
23%
6.3%
Walmart
Which retailer stands out as the
clear low-price leader?
3.7%
2.3%
2.7%
3%
3.3%
Walmart
Costco
Other
Real Canadian
Canadian Tire
No Frills
Loblaws
Best Buy
FreshCo
Atlantic Supers
Continued on page 4
Continued from page 3
Methodology
Canadians say “no thanks” to
other retailers
Target may be getting a warm reception
in Canada, but other U.S. retailers shouldn’t
expect a similar reaction.
When asked “are there other U.S. retailers you would like to see open stores in
Canada,” most of those surveyed shrugged
their shoulders. It seems Canadians are pretty
happy with the mix of retailers they already
have. Most struggled to identify specific retailers they would like to see enter the market
next. For example, Macy’s topped the listed,
mentioned by a paltry 4.5% of respondents,
followed by Nordstrom, mentioned by a scant
2%. It is unclear where Target would have
ranked had Canadians been asked a similar
question prior to the Zeller’s acquisition, but it
is safe to say that sometimes shoppers don’t
know what they are missing until a new
retailer announces plans to enter a market
and a sense of anticipation builds.
The fact that there is no great outcry for a
particular U.S. retailer to come to the market also
doesn’t appear to be due to any sort of nationalism. When asked if they wished there were fewer
U.S. retailers in Canada, nearly 81% said, “no.”
Target Supplier News worked with the Field Agent organization to formulate
and execute the survey featured in this issue.
Field Agent is an innovative organization that leverages the power of crowdsourcing and mobile technology to gather unconventional business insights. The
Fayetteville, Ark.-based company’s proprietary mobile research tool is designed to
provide data and insights quickly, efficiently and accurately across a spectrum of
shopper segments during all phases of the path to purchase through to the
in-home product usage phase.
The company relies on a network of more than 200,000 people equipped with
smartphones who are known as Field Agents. For purposes of the Canadian Retail
Study, 300 Field Agents who were identified as mass market shoppers participated
in the survey which was completed via their smart phones on Feb.27, just weeks
before Target opened its first stores
in Toronto as part of a 2013 expansion
program that calls for 124 new stores. l
A pocket of nationalism does exist though with
19% wishing there were fewer U.S. retailers.
Canadians favorite places to shop
Where would Canadians go to shop if they suddenly found a spare $100 in their wallet?
Target Suppliers News asked that question as an
unconventional way of unearthing shoppers discretionary preferences in the face of a modest windfall.
Which three retailers would be most affected by Target’s
opening in Canada?
Walmart
33%
Real Canadian Superstore
Sears
Other
Canadian Tire
Shoppers Drug Mart
31.7%
24%
22%
20%
13.7%
Costco
London Drugs
Loblaws
Future Shop
Staples
Best Buy
Dollarama
Atlantic Superstore
Sobeys
Rexall
Home Hardware
No Frills
Safeway
4
9.7%
8.7%
7.3%
6.3%
5.7%
5.3%
4.7%
3.7%
3.3%
3%
3%
3%
88.3%
Best Buy was the overwhelming favorite mentioned most frequently by 21.7% of
respondents. Its Canadian subsidiary Future
Shop, acquired by Best Buy over a decade ago,
wasn’t far behind at 13.3%. Walmart was the
second most popular place to spend $100 of
found money, mentioned by 15.7% of respondents, followed by Costco at 12%.
Continued on page 9
Which retailers will you shop at less once Target opens in
your community?
Walmart
26.3%
Other
20.3%
None
14.7%
Shoppers Drug Mart
Real Canadian Superstore 9.7%
Sears 9.7%
Canadian Tire 7%
London Drugs
6.3%
Dollarama
4.7%
Rexall
4.7%
Future Shop
4.3%
4.3%
Staples
3.7%
Costco
3.7%
Loblaws
3.3%
IGA
3.3%
Save-On Foods
3%
Home Depot
2.7%
Food Basics
2.7%
Metro
2.7%
No Frills
59.7%
Surveying Target’s
New Frontier
A
s Target takes its first steps in the fresh
snow of the Canadian landscape, the
market itself continues to shift with
plenty of new developments, which means
that Target will have to adjust its game plan
on the fly as their stores start opening from
coast to coast.
Here are some basic facts about Canada
that set the scene for Target’s launch “north
of the border”:
- Canada has population of 35 million
people, with 75% living within 100 m. of the
U.S. border.
- Canada is officially bilingual, with more
than 20% of the population being Frenchspeaking (mainly in Quebec).
- Canada is highly diverse, with 20% of
the population speaking a language other
than English or French.
- A strong economy driven by natural
resources growth, with 7% unemployment in
December 2012.
- Higher store labor costs with minimum
wages ranging from $9.75 to $11.00.
- Retail landscape dominated by five
players: Loblaw, Sobeys, Metro, Walmart and
Shoppers Drug Mart.
Since Target purchased the leases of
Zellers stores in January 2011, the retail
and supplier communities have been getting
ready for this injection of “new blood” into
the Canadian retail landscape. The last event
of this magnitude happened nearly 20 years
ago when Walmart purchased the defunct
Woolco chain back in 1994.
Target has picked the best 122 Zellers sites
and is investing millions of dollars to bring them
up to the same image standard as the U.S.
stores, meaning a complete gutting of the existing space in most cases.
In a peculiar move, Target decided to sell
39 Zellers sites to its most direct competitor,
Walmart Canada. Most of these stores have now
6
reopened under the Walmart banner as part of
a $750 million capital expenditure in Fiscal 2012.
Walmart continues its aggressive expansion of its Supercentre format, rolling-out to
Atlantic Canada in 2013. Walmart plans to
have a total of 388 stores in Canada by the
end of 2013.
Jeff Doucette
founder of
Field Agent Canada
Walmart also has been making investments behind in-store merchandising with
best-in-class execution of seasonal events
over the past year. ISM is a natural strength
of the Target organization, and Walmart
seems to have understood that the in-store
environment must be enhanced in order to
defend against Target’s launch.
Canada’s largest retailer, Loblaw Companies, is a food-focused retailer with operations from coast-to-coast under a variety
of regional supermarket and supercenter
banners.
While both Walmart and Loblaw are likely
to lose some share to Target due to their
sheer size, the most vulnerable Loblaw
format will be the Real Canadian Superstore, which has 112 outlets in Ontario and
Western Canada. These stores have large
health & beauty, electronics, housewares
and clothing sections, which will compete
head-to-head with Target’s offerings.
Loblaw’s Joe Fresh line of cheap-chic
clothing, which has made the supermarket
chain one of Canada’s largest clothing retailers, will likely be the main weapon used
to defend against Target. Incidentally, Joe
Fresh will also launch at JCP stores across
the United States this month, giving Target a
headache on both sides of the border.
Target will have a competitive offering
of food in Canada, including a variation on
PFresh in most stores, but it is seen more as
a convenience offering in Canada verus the
traffic and basket-building role that PFresh
has plays in the United States. For this reason, Target is not expected to have a major
impact on such traditional grocers in Canada
as Sobeys and Metro. In fact, Sobeys will be
the wholesaler of fresh food to Target for the
foreseeable future.
However, rumors are swirling about the fate
of Canada Safeway and whether the Canadian
operation will be sold to Loblaw, Sobeys or
Metro in 2013. All three suitors are cash-rich
and would love to add Safeway to their network
if it were made available for sale.
Canada’s largest drug store operator, Shoppers Drug Mart has more than, 1100 stores
and is the leading beauty/wellness retailer in
the country. Target’s strong merchandising in
beauty will require Canadian retailers to up
their game in the mass cosmetics and beauty
sections of their stores.
In Target, Shoppers Drug Mart will also
face a new competitor in the Pharmacy space,
adding more pressures to its main profit and
traffic-driving category.
Canadian retailers also are looking to
enhance or launch loyalty programs to compete
against Target’s RedCard. Loblaw and Walmart
are developing their own loyalty programs,
while retailers such as Toys R Us have joined
the popular Air Miles coalition loyalty program.
In addition, Canadian retail icon Canadian Tire
is migrating its program to a modern cardbased system, eliminating its Canadian Tire
money, which is often referred to as Canada’s
second currency.
Continued on page 9
New challenges
for merchandise execution
Cindy Sattler
CEO
Lawrence Merchandising
Services
spent on marketing, there is declining discretionary spend. Suppliers are cautious on how to
they allocate their marketing in-store support
dollars. To capture fair market share, in-store
execution must be a success through accuracy,
timeliness, efficiency and speed. In order to
The retail
in-store support as an outsourced solution. The
justify spend, analytics become more critical to
industry has
MSO industry offers suppliers the opportunity to
show ROI and the impact of success.
come a long
get experienced resources, providing the ideal
way since 1962
level of support at the precise time to maximize
services, and our reps are in every Target store
when Lawrence
sell-through. Recent legislative initiatives include
at least once a week. Our clients often approach
Merchandising
President Barack Obama’s recently proposed
us with specific service needs and are pleas-
Services began
increase in the minimum wage to $9 an hour.
antly surprised by the value-added information
operations and
If enacted, this increase would affect the MSO
we are able to provide along with our regular
Target and other
industry and the CPG firms, those people in the
services. Many suppliers do not think to ask
retailers opened
retail industry who leverage the resources and
for more information about what our reps see
their first
who are reliant on the services we provide.
at the store level, what is around their product
discount stores.
Changes in the workplace have forced com-
We perform a wide variety of merchandising
placement and what stands out from the compe-
Today, retailers and the merchandising service
panies to challenge the status quo. This is true
tition. There is a great deal of information to be
organizations built to enhance in-store execu-
for the retail industry, making enhanced product
gleaned from simple day-to-day assessments
tion are operating in an environment that offers
presentation in the stores critically important
and the observance of shopper patterns. Most
unprecedented challenges that require careful
for suppliers who are competing for lower
successful suppliers will leverage a traditional
navigation of uncertain waters to capitalize on
consumer spend. Attention is now more focused
merchandising service to obtain store-level
new opportunities.
on finding new solutions to merchandise product
insights and take advantage of added potential
versus the traditional means of marketing or
benefits.
The recession and tepid recovery has already
It is critical for suppliers to choose the right
had a significant impact on in-store support.
passively allowing the at-shelf decision to occur
Retailers have responded to the economic
without additional support. Such needs within
partner, especially as it relates to performing work
climate by cutting back on resources at the
the marketplace have fostered the necessity for
inside Target stores. As the largest and longest-
store level. Suppliers are then left to determine
suppliers and retailers to rely on the services of
running MSO doing business with Target, we
how to financially yet optimally support their
MSO groups.
occupy a unique vantage point to
products at retail in a way that will deliver ROI
Multichannel retail is a reality today where
offer perspective on how the industry and Target
for their marketing programs and ensure their
MSO groups play a key role in creating an
have changed and will continue to evolve. We
product and fixtures are set on the selling floor
impactful guest experience. In the past, many
were there for the advent of the discount store
with POP materials in place. This spend will
merchandising efforts were directed solely
and have seen the evolution of formats over the
encompass the successful sell-through of their
to such specific departments as clothing and
years, including Target Greatland, SuperTarget,
product through the complete retail cycle from
accessories. However, retailing has evolved to
CityTarget, Urban and PFresh. In most cases, the
back room to the point of sale. A further factor
include merchandising emphasis on additional
formats included the introduction of grocery, deli
to the cost of managing in-store support and
categories, such as grocery and HBC items, due
and bakery goods. The latest expansion effort in
ROI is the increased use of technology at shelf
to the increased demand and the heightened
Canada is unprecedented in the company’s his-
that requires some level of ongoing support or
competitive landscape of all retail departments.
tory and promises to be as exciting for suppliers
maintenance, which also must be rationalized.
Consumers are increasingly making more
as it is for Target.
Companies have been challenged over the
decisions at the shelf, so product presentation
Each step of the way, the philosophy of striving
last few years to respond to the realities of the
and in-stocks are paramount to ensuring sell-
to enhance the guest service experience through
U.S. economy, and this has included the down-
through.
merchandising excellence and outstanding
sizing of resources, as well as outsourcing of
With the increased pressure of spend on sup-
product assortment has made this retailer stand
various functions, including IT, human resources,
pliers, it is critical they receive in-depth analytics,
apart from the competition. We don’t expect the
accounting and call center technology, to name
providing consumer insights, store-level retailer
company to alter its enduring value proposition,
a few. There is an opportunity in the retail
insights, and product placement performance
but the environment in which it looks to execute
industry, given recent legislative initiatives and
at the shelf. In the fast pace of retail, with the
that strategy presents intriguing new growth op-
continued economic pressures, to re-evaluate
effects of the recession and the impact of dollars
portunities for suppliers. l
7
Virtual
merchandising
becomes reality
T
he McGladrey building in downtown Minneapolis isn’t much to look at. It was built
in 1969, and over the years, its stature was
reduced as taller structures joined the skyline.
Appearance can be deceiving, however,
and on the top floor of the 20-story structure,
behind a locked door just down the hall from
a Unilever office, Target and some of its top
suppliers are re-inventing the future of retail
decision-making.
The building is home to a facility known
as an “Interactive Collaborative Environment,”
operated by the Red Dot Square division of
global advertising giant WPP. The large open
space features a concave white wall on which
Red Dot can simulate a variety of store interiors
and shelf sets that are viewable by those seated
in two rows of theater-style chairs. What makes
the facility special is the use of virtual technology that is designed to accelerate, improve
and optimize every aspect of retail decisionmaking. The virtual technology isn’t exactly
new and the facility was opened five years
ago, but what’s happened lately is usage of the
technology has broadened as retailers awoke
to the benefits.
According to Red Dot CEO Jeremy Cohen,
CPG companies such as Unilever and KimberlyClark were early adopters of virtual reality
technology because they saw its usage as a
competitive advantage. More recently, however,
there has been a shift as retailers have come to
understand the benefits of the technology and
now encourage use by all suppliers. That usage
falls into four broad areas with a consistent underlying value proposition involving faster, more
accurate decision-making, according to Cohen.
“The facility has really become a focal point
for the technology, but usage of the technology
extends beyond the facility,” Cohen explained.
For example, consumer research and
shopper insights can be readily obtained with
virtual technology without the need for other
conventional methods of research. Red Dot
can simulate the experience of walking into a
Target store and going down an aisle populated
with an array of items in varying configurations.
Shoppers can visit the virtual store and
thanks to eye-tracking technology, the duration of their gaze on specific areas or signage
can be monitored to produce a heat map of
the shelf.
Continued on page 9
Bob Musman, head of client management for Red Dot Square Solutions’ Minneapolis office, displays the capabilities of the firm’s virtual technology.
8
Target’s New Frontier continued from page 6
Continued from page 8
Recently, a lot of attention has been paid to
price discrepancies on similar or identical goods
on both sides of the border. A recent Field Agent
survey found that prices were 20% more expensive at Walmart stores in Canada then they are
in the United States, despite the Canadian dollar
being valued at parity to the greenback.
While retail price differences tend to be driven
by supplier price lists, not inflated retailer margins,
Canadian consumers and law makers will no doubt
be keeping a close eye on how Target prices items
in Canada compared to its U.S. stores.
Differences in the price of a box of Tide may be
out of the control of Target, but the retail price of
a Michael Graves teapot and the rest of Target’s
owned brands will likely not be able to support a
large price gap versus the U.S. stores.
Target also has used its design partnerships
and exclusive brands to build links to the Canadian consumer. Target recently selected a young
Quebec designer as the winner of the Target
Emerging Designer Award, which includes an
exclusive clothing line that will launch in 2014.
In addition, Target stores will be carrying a
limited time only collection from Roots Outfitters,
a clothing and accessories brand that is as
Canadian as maple syrup and hockey.
We also would not be surprised to see an
execution of “The Shops at Target”, stocked with
popular Canadian regional brands, as part of the
early merchandising plan for Target Canada.
Without question, 2013 will be a very dynamic
year in Canadian retail, and Target will be a catalyst
in driving changes that will benefit Canadian
consumers through competition.
Target will be successful in Canada; that is not
really a debate. However, Canadian retailers will
have to be better merchants and draw on their
deep understanding of Canadian consumers to
minimize the bleeding of market share to Target
Canada.
It’s going to be a very interesting year! l
Changes to packaging and placement can
then be made quickly and evaluated further
to determine shopper reaction and optimize
assortments.
Another application involves the development
and testing of design elements that include the
physical layout of a store and in-store shopper
marketing elements. It enables brands to evaluate shopper behaviors on the path to purchase
and those points of interruption where it makes
the most sense to activate purchase.
A third application is the area of virtual
merchandising, which simplifies the creation of
assortments and supplier interaction.
“This is the thing in particular that Target is
starting to look at,” Cohen said.
And for good reason. The merchandising
capabilities of virtual reality help alleviate many
of the pain points associated with traditional
supplier-and-buyer interaction, while improving
decision-making accuracy and speed to shelf.
For example, buyers are able to make more
informed choices about which items belong in
the planogram based on research and insights,
but then those items can be presented on the
virtual reality wall and viewed with supporting
attributes for individual items.
According to Cohen, retailers are able to
view a shelf with products that are color-coded
based on attributes of their choosing, such as
Jeff Doucette is the founder of Field Agent
Canada an iPhone-driven audit service that is
revolutionizing how retail audits and mystery
shops are completed in Canada. He is a veteran
of the Canadian CPG industry. including various
sales roles with Unilever and L’Oreal. He is also
principal of Sales Is Not Simple, a Calgary-based
CPG consultancy. He can be reached at jeff.
[email protected]
9
rate of sale, margin contribution or trip-generating capabilities.
“It helps buyers develop the right range of
products for the right stores,” Cohen said. “It
can save as much as 50% of a buyer’s time and
can produce a 3% to 5% uplift in sales based
on improved decision-making through data
visualization.”
From a suppliers’ standpoint, Cohen contends, “virtual reality is the Power Point for this
decade,” referring to the ubiquitous Microsoft
presentation software relied upon by a generation of salespeople to pitch products to retailers.
“Why would you show a static representation
of what shoppers might see in-store, when you
could show what they actually will see and then
show it from different perspectives?”
The fourth application that Cohen sees for
virtual reality is the concept of collaboration
and co-creation that allows stakeholders to get
to “yes” faster. With suppliers and buyers in
the same room, they can employ virtual reality
to take ideas or concepts that are partially
developed, modifying them in real time, reach
consensus and move to execution faster. Cohen
sees this approach replacing the traditional and
time-consuming process where buyers and suppliers would go back and forth with each other,
attempting to schedule meetings, rescheduling
meetings, all to adjust plans before reaching an
agreement to begin execution. l
Continued from page 4
It’s interesting to note that Canada’s homegrown retailers didn’t rate highly. Canadian
Tire was mentioned by 8% of respondents,
but after that, retailers such as Loblaws,
Shoppers Drug Mart and Loblaws’ Real
Canadian Superstore division were way down
on the list. l
Once Target opens, will you shop at Walmart more or less frequently?
35.7%
Much more
Somewhat more
Same amount
47.3%
12.7%
3%
1%
0.3%
Somewhat less
Much less
I don’t shop at Walmart
LAWRENCE
MERCHANDISING
Right on Target since 1962
We’ve been working with Target since the day they opened their doors.
We move more products in more locations than anyone else. Every store.
Every week. And the best completion rates in the industry. Guaranteed.
Joel Nelson: 877-483-5785 x715 / [email protected]
Greg Knight: 877-483-5785 x702 / [email protected]
Who’s showrooming Who?
D
igitally enabled comparison shopping, also
known as showrooming, isn’t just about
Amazon. A new study from market research
firm ClickIQ show’s Amazon isn’t as big a threat
to Target as increasingly competent brick-andmortar retailers.
The Minneapolis-based firm surveyed 1,000
members of its U.S. consumer panel Jan. 30
through Feb. 7. Target respondents must have
shopped in a retail store within the past three
months, own a mobile device and used the
mobile device while at a brick-and-mortar store
to research a product and have since purchased
the researched product.
ClickIQ expected the results to reinforce conventional wisdom and show Amazon.com as the
largest benefactor of showrooming. However, the
study results show an added dimension to showrooming beyond the online losses and revealed
Best Buy, Walmart and Target all lost and gained
sales from the price comparison practice.
For example, 20% of 368 respondents who
researched a product while at a Best Buy store
indicated that they actually purchased the
researched product at Target. The significance in
this number is that it is twice that of those who
purchased the product at Amazon.com. With
another 10% completing the sale at Walmart, it
is apparent that showrooming isn’t just providing
online-only retailers a showroom floor, according
to Click IQ.
Walmart lost nearly as much to Target (18%)
from the 395 respondents who researched a
product while at a Walmart store, and only 14%
to Amazon.com and 7% to Best Buy. Although
it might appear that Target is the winner here,
Target did not come out unscathed. Of the 352
respondents who researched at a Target store,
14% purchased the product at Walmart, 13% at
Amazon.com and 7% at Best Buy.
Overall, Amazon.com was still the biggest
total benefactor among respondents in the
study with 13% of all the self-reported sales.
Many purchased at the retailer where they were
shopping, while only a very small percentage
ended up purchasing at a retailer online site like
Bestbuy.com, Walmart.com or Target.com. Of
those who purchased online (240 of the 1,000
respondents), a little over half of them reported
not paying sales tax. Roughly 65% of the group
who did not pay sales tax indicated that it had
at least some amount of influence on their
purchasing decision.
Another noteworthy result from the study is
that those consumers who engage in showrooming do so quite often. When asked how
many products they researched while in the
retail store with their mobile device within the
past three months, 80% indicated that they had
researched at least three products, with 43%
overall responding that they researched five or
more products. l