Market Overview

Brick-and-Mortar Stores Strike Back Against Online Retailers

Brick-and-Mortar Stores Strike Back Against Online Retailers

Shoppers looking to avoid long lines and physically draining shopping experiences have started to shift away from brick-and-mortar retailers and more towards online shopping.

Even the shoppers who travel to stores are “showrooming," a practice in which the shoppers examine and test out products at the traditional retailers, but later purchasing the item online at a lower price.

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Largely due to the rise in online shopping and showrooming, online retailers such as Amazon (NASDAQ: AMZN) are expected to take significant traffic away from companies with very weak online presence like Marshalls and T.J. Maxx of the TJX Companies (NYSE: TJX).

Popular retailers like Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT), however, has built a strong online presence over the years and is taking significant steps to protect their market shares against e-commerce companies.

The biggest step the brick-and-mortar stores, including Best Buy, Staples (NASDAQ: SPLS) and Target (NYSE: TGT), have taken against showrooming is matching the prices of authorized e-commerce websites:

"With the notable exception of accessories, Best Buy's prices are largely in line with those of Amazon, and in some cases were actually lower," stated BB&T Captial Markets analysts Anthony Chukumba and Eric Cohen in a recent report.

Also because of the compressed holiday shopping season this year, brick-and-mortar stores are expected to have extremely competitive prices even against online retailers as they try to empty the inventories as soon as possible.

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Traditional retailers are also offering exclusive items and deals this holiday shopping season to lure in customers. Best Buy is offering Samsung’s Galaxy in foreign blue color.

The brick-and-mortar stores are playing to their strengths this holiday season by offering solid prices and deals while implementing or expanding same-day delivery and in-store pick-up programs to ease the painful shopping experience.


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