If you want to scare a traditional retailer, whisper the word "showrooming" in its ear.
Showrooming -- the booming trend that finds shoppers checking out potential purchases in bricks-and-mortar stores, then whipping out their smartphones to find the same products cheaper at online retailers -- is crushing many chains.
It isn't a fair fight. Physical retailers just can't compete with the lean overhead and occasional state-sales-tax advantages of Web-based retailers. Since any given mom-and-pop shop is now competing against every single online outlet -- instead of merely a slightly cheaper rival at the other end of town -- it's hard to keep loyal customers when the savings can be substantial in cyberspace.
Why do you think Borders closed down last year? The liquidation of Circuit City two years before that wasn't a matter of people tiring of consumer electronics. There are plenty of chains on the ropes right now that probably won't be around in a few years because of showrooming.
However, a few retailers seem to be holding up just fine in the fight against discounting dot-com merchants. Some of them are taking steps to fortify their physical storefronts, while others simply have models that provide some natural protection.
Let's take a look at the chains that are built to withstand the growing threat of showrooming.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Amazon.com, Best Buy, and Costco Wholesale. Motley Fool newsletter services have recommended buying shares of Costco Wholesale, eBay, hhgregg, and Amazon.com.
Get info on stocks mentioned in this article: