Has showrooming killed browsing?
The closure of HMV’s Irish stores is down to many things, including how showrooming has replaced browsing
It’s odd to think that these two CDs, Dennis Wilson’s “Pacific Ocean Blue” and Dean Rudland’s compilation of Willie Mitchell’s Memphis nuggets, are probably the very last purchase I’ll ever make at an Irish HMV store. Unlike the HMV stores down here, the Derry shop is still trading, albeit in closedown mode, so I popped in for a browse at the weekend and came out with those two purhcases.
The cuts were in full effect so the shop was busy enough for a Friday afternoon, but there didn’t seem to be that much cash coming into the tills even with those deep discounts. The days of browsing the racks and making random purchases seems to be over. Instead, people were still comparing and contrasting the prices in the store with whatever website they were browsing on their smartphones. It’s a new type of browsing.
That’s one of a myriad of reasons to explain why 300 workers at the HMV shops in the Republic of Ireland were laid off yesterday. As the receiver David Carson noted, all the HMV stores in Ireland were loss making and it was not possible to attract a purchaser. While some of the staff at individual outlets may argue with this statement and claim they were profitable, the facts tell another story. The receiver is just doing his job based on the figures in front of him and he has decided to pull the plug. HMV Ireland is no more. Nothing more to see here, time to move on. Memo to the masses: don’t buy individual shop vouchers next Christmas.
It will be interesting to see what other retail casualities occur between now and the end of the year. Neil Briscoe notes in today’s paper that the recession since 2008 has also been a “bloodbath” for car retailers, with “dealers closing up and shutting down in packs”. While this is largely down to a decline in car sales, Briscoe looks at potential changes in the marketplace and a move away from the traditional retail model. He talks to James Ruppert, who believes that “car retailing is going to have to follow the likes of HMV and Habitat and move more and more online”. It seems that not even the car market can avoid internet-based disruption.
It’s disruption largely based on one thing: price. Because money is tight, price has increasingly become the most important consideration for consumers when they go shopping for goods. When it comes to entertainment products, products which are by and large still luxury goods (though OTR readers would argue that they’re as essential as food or petrol), price also dictates purchasing patterns. Knowing that prices are cheaper online means that even when we see a very low price in the shops – see the shoppers in Derry last Friday – we still think we can get it cheaper online so we procrastinate and put the purchase off until later. The shops are where we go to size up the goods, but the internet is where we go to make the purchase.
All of which means that traditional retailers have just become expensive showrooms paying high rents and rates to allow people handle the goods before buying them elsewhere. While there was always an element of this in retail – many of us will know that there was often a price difference between shops, with Tower, for example, always much more expensive than HMV – the competition then was a store down the street rather than some huge online warehouse. Now, we have different economies of scale and different levels of competition, with the bricks and mortar stores just unable to match the low prices offered online.
Those of us who have happily spent time – and money – browsing record and book stores will bemoan this state of affairs and this loss of one of our favourite wastes of time. Without the shops, there can’t be any browsing. Without the shops, there also won’t be any scope for showrooming either so all the action moves online. The only model that can overcome this is where there is no price difference between the High Street and online. It’s why Apple can buck these trends and why mobile phone companies and coffee shops are the new retail stars. It seems that if you want to be in retail, you have to make sure you’re selling something which can’t he obtained online.