JAPAN: major electronics retailer price-matches online shops to tackle 'showrooming'

15 Jun 2012

Yodobashi Camera's Akiba store (picture: Jocelyn Strob Simard)

It's becoming a major problem for retailers: customers try or have demonstrations of products in their local shops, then go online to buy in order to get the best price. Now one of Japan's larger consumer electronics retailers is aiming to tackle this 'showrooming' trend – by price-matching online offers.

Yodobashi Camera has put up signs in its huge eight-floor outlet in Akiba – Tokyo's 'electric town' – offering consumers able to show a lower online tag a price match.

The company – which has 21 large stores in Japan, and despite its name sells everything from photographic gear to TVs, computers and domestic appliances – has become concerned that the 'showrooming' trend has started to hit its sales, as it has in the States.

But as Japanese commentators have suggested, that means it's going to have to offer big discounts on some major items, since a TV can sell for 30% less online than Yodobashi offers it at its 'bricks and mortar' locations.

Retailers in Japan are suffering from the aggressive inroads Amazon is making into that market, along with the arrival of price-comparison websites such as Kakaku.com (above) and smartphone apps enabling shoppers to scan the barcode on an item in-store and instantly see results from a range of price-comparison engines.

Kakaku claims to have 35m users a month, and covers everything from consumer electronics to clothing and food, while one smartphone app has already been downloaded 650,000 times.

Amazon has annual sales of some Y500bn (£4bn) in Japan.

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I've been wondering for a while now when something like this starts. The only reason why brick and mortar shops still survive is a) many people are still TOO scared to buy online and b) really rich people can't be bothered for those 30% difference.

Now, with more people taking a plunge and trying online shopping (I personally persuaded at least 10 people so far who had never bought anything on the internet to try online shopping and most of then swear by it now after having tried) retail shops will have harder and harder times. However, since they have to pay electricity, rent and all other expenses, I honestly can't see how a retail shop can match online prices.

An interesting response to an issue facing bricks and mortar retailers around the world. Probably easier for these big chains than smaller operations.

The prices of the bigger retailers are pretty closely matched here in Japan, and the example of buying a TV for 30% less online isn't all that it seems because you can haggle over the price, particularly for items like TVs, and come away with a similar price in store already. On other items where there is less competition it will be interesting. I'll give it a go with HiFi gear where they've had almost no interest in reducing the price.