Charlie Cook On Air: Showrooming

If you are a big box retailer (and how many of you are?) a new term sends chills through your business blood: Showrooming. Argh! Like the Best Buy CEO (make that Ex-CEO) doesn’t have enough problems on his hands.

The term refers to shoppers who “browse” at brick and mortar stores, treating these stores like catalogs, then go online and buy their product choice at a retailer like Amazon.

Many of these shoppers stand in the store, right in front of the products (like TVs, refrigerators and other big ticket products), use their smart phones to compare prices, maybe even ordering from one of the sites while a sales person stands by watching a potential commission going into the ether.

No one can blame the shopper. Often there is no tax involved in online shopping. Even my 10 year old daughter hates paying tax on purchases, and she is spending my money. Many of the online sites are offering free shipping when the price is significant enough.

Most retailers have opened online sites to compete with Amazon but in “most” cases Amazon still is able to undercut the price. Additionally in many cases the B&M retailer has a cheaper price online than in their stores.

What these retailers are discovering is that their battle is moving online and they need to build loyalty with their customers. This may end up costing them some money and it may begin the demise of their B&M facilities.

Look what happened to Borders. Just last week the federal government stepped in and chastised the online bookseller for price fixing. These are guys who have only licensing as an overhead for selling books to e-readers and they are protecting their position by over-charging for new books. I understand that they have denied this charge but, DUH! If you can buy a REAL book for $15.00 (hardcover, shipping, inventory costs, personnel costs) why should you pay $14.99 to have one e-mailed to your e-reader?

Okay, Bucky, what does any of this have to do with radio and records? Many of you already see the connection.

Is radio becoming the brick and mortar of the music business? Is the CD, under attack by Walmart for taking up too much floor space and The Big Three for taking up too much dashboard space, going the same way?

A study this week reported that 42% of the US population is listening to Internet Radio. Without getting into too many numbers, because my brain starts to swell, 65% of these IR fans also listen to terrestrial radio (though not so much in the 18-24 demo).

I wonder which group is showrooming? Those getting new music on TR or those getting new music on IR? And will one or the other aggressively try to claim the new music crown?

I have four radios in my office: a WiFi radio, an HD radio, a pick up “what ever I can” radio, and one on a disposable phone I bought when I lost my phone last month that has an FM tuner and allows me to walk around listening to radio.

At home I have a radio in the kitchen and one in the bedroom. Of course I have one in the car.

The bad news for those radio manufacturers, and at some point for terrestrial radio, is that I can do everything above on my smartphone.

For record companies it is still too easy to transfer music from friend to friend and I suspect that services like Amazon Cloud Drive and iCloud allow multiple users access to the same account seamlessly.

I know that my wife, daughter and I share one Netflix account across their TV in Los Angeles, mine in Morgantown and their iPads, Kindles, iPhones and my Droid.

Looking at my phone, I get every Major League Baseball game every day and my choice of the feed for $15 a year from MLB.com. I have 20 station apps, iHeartRadio, Rdio, DAR.fm, Pandora, Spotify, Scanner Radio (which is kind of fun), and Stitcher.

I also have Hulu Plus, Netflix, TV.com, Blockbuster, two e-reader programs and a half a dozen newspapers.

I also have an unlimited data package (at this point) and if I can find an electrical outlet when my battery dies, I can be connected without owning a real radio, CD player, TV or a newspaper subscription. (For you younger readers people used to actually deliver a physical newspaper to your home or office. You  would subscribe to the newspaper, sending in real money, and in the middle of the night an elf would come by and drop it off at your door. I know, how unbelievable is that? )

I hope that you didn’t read this far hoping for a revelation on how to solve this online issue. Because if I had one I would be selling my ideas to some rich guy for a billion dollars and the article would have ended much before this sentence.

I just point these things out and try to tie in everyone’s woes so we keep in mind that, while there is not going to be thousands of empty retail outlets and radio is not going to stop using towers to communicate with the almost 300 million Americans that listen each week, we do need to have plan B ready.

Many people are lazy. We went from getting up and changing channels (oh man, the younger readers are going to need therapy if I keep this up) to remotes to everything you need in your pocket. The easier it becomes for the consumer, the harder it becomes for us to feed their desires and still make a profit.

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