Ben Mathew Economics
  • Home
  • Bio
  • Blog
  • Recommended
  • Mailing List
  • Contact

Solving Showrooming

3/5/2013

0 Comments

 
You walk into Best Buy, check out the cameras, pick one out, and order it online from Amazon. Best Buy serves as a showroom for Amazon. And Amazon undercuts Best Buy because it doesn't have to maintain its own showroom. This can't last.

There are several possible solutions. The easiest one to implement, I think, is for manufacturers to give physical stores a discount relative to online stores. The discount is essentially a fee for displaying the manufacturer's product. It will have to be big enough to keep brick and mortar retailers competitive with online retailers.

This works only for when a product needs to be displayed in physical stores. That's more true for some products (TVs, sofas, laptops, cameras, mattresses, ovens, etc.) than for others (generic things like cough syrup, milk, printer paper, etc.) Eventually, the generic products will be sold almost exclusively online. The non-generic products will be sold by a mix of physical and online stores, with physical stores staying competitive with online stores through the showroom discount they get from manufacturers.
0 Comments



Leave a Reply.

    Ben Mathew

    Author of Economics: The Remarkable Story of How the Economy Works

    Archives

    October 2016
    September 2016
    February 2016
    November 2015
    September 2015
    July 2015
    June 2015
    May 2015
    March 2015
    February 2015
    December 2014
    November 2014
    October 2014
    September 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013

    Categories

    All

    RSS Feed

Powered by Create your own unique website with customizable templates.