TV Makers Fight 'Showrooming' With Price Floors

by Steve Smith, May 31, 2012, 7:55 AM

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Consumer electronics manufacturers are trying to help retailers diffuse the effect of in-store mobile-look-ups that result in purchases online. According to InternetRetailer.com, both Sony and Samsung recently set minimum pricing for their retailers to ensure that no single outlet online or offline could radically undercut another. Samsung is calling it “unilateral pricing” on some of its 2012 model TVs.

A Samsung spokesperson told the site that the new policy is designed to “provide an incentive to retailers to effectively showcase such innovative products and educate consumers about their benefits.” The manufacturer says that the policy is heeded at the “discretion” of the individual retailer, but that “non-compliance does trigger certain consequences.” Sony did not comment on its official policies or enforcement.

It is still unclear whether “showrooming” is having the impact on retail that some struggling franchises like to say. Target took aim at the purported phenomenon earlier this year by urging its vendors to create special retail-only products that could not be acquired online during a mobile look-up. Target also discontinued carrying the Amazon Kindle line of e-readers, which some took as a move against the online retailer that has been most aggressive in trying to poach consumers with in-store price comparison and m-commerce apps.  

And yet some actual research suggests that the in-store behaviors retailers are attributing to the new mobile phone invasion in the aisles is not much different from the price comparisons and “showrooming” that have been with us for many years. Earlier this month, Wave Collapse found that 54% of smartphone users accessing their phones in-store were looking for product availability and pricing at another local store, while 53% also were checking Internet prices.

But most of all, the survey found that shopping app users were just overall big spenders, and were actually more likely to buy something in-store than those who don’t use shopping apps. NPD says that it finds 20% of consumers claiming to check out items in-store before going online. Smartphones simply accelerate and optimize a pre-existing phenomenon.

The difference between in-store pricing and online pricing is diminishing in many cases to the point where comparison pricing might motivate an immediate buy. A consumer may just as easily decide that the 5% or 10% advantage of an online buy is not worth the extra time or hassle if he or she can get the item immediately for an incremental extra cost.  

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