Internet sales tax advocates, led by the big-box retailers, are a creative and well-funded bunch. To justify creation of a new tax on internet sales, they are happy to promote any argument, no matter how tenuous.
But this week the internet sales tax advocates abandoned one of their favorite justifications, “showrooming”.
“Showrooming” is when a consumers visit stores to assess a product but then buy it online from another vendor. The standard rhetoric was that consumers were showrooming with out-of-state vendors in order to avoid paying sales tax.
We’ve always doubted the sales tax was driving showrooming, saying it was more about finding lower prices and better selection at online sellers like Amazon. And we have evidence, since Amazon says their sales continue to grow when they begin collecting sales tax in a state (they’ll be collecting tax for 60% of the US population in 2014).
Now, those same tax advocates are saying that showrooming wasn’t about sales tax after all, and they’ve solved the problem by matching low prices and improving customer service. Here is Best Buy’s new chief executive in the WSJ:
“A year ago, people said that showrooming would kill Best Buy,” Mr. Joly said in an interview. “I think that Best Buy has killed showrooming.”
And Best Buy is hardly an outlier:
Nevertheless, Best Buy isn’t alone in trying to co-opt the term. Wal-Mart Stores Inc. says it is benefiting from “reverse showrooming” as shoppers explore products online before buying them in stores. Target Corp. says it installed Wi-Fi at its stores partly to encourage customers to browse products on their phones.
In fact, new research from Accenture finds more evidence of the opposite of showrooming: “Webrooming,” where consumers browse and research items online and then make their purchase in a nearby store.
So, now that showrooming is not a mortal threat to big box and main street retailers, we’d hope to hear less of that worn rhetoric to justify a new sales tax system.
But don’t hold your breath. Like unruly Black Friday crowds or ugly Christmas sweaters, sometimes you just have to grin and bear it.