Showrooming: Don’t Fight it – Get Proactive

by Kate Enright

http://www.vonbismark.com

“Showrooming.” It is a word that strikes fear into the hearts of retailers worldwide, many worry about it being the end of conventional stores as we know them, while others say it is blown out of all proportion. One thing is for sure, there is no denying the figures, and it is well and truly on the rise. Showrooming is the ever-growing practice by shoppers of checking out products in stores and then going online to buy them at reduced prices. And the growth in smartphone ownership (sales up 58% 2010 – 2011 – 1.08 Billion users total) has made it much easier and more accessible from any location. Mobile use in fact has driven some retailers to paranoia, wondering who in their store is a customer and who is just there to see an item in person, and checking out the price on Amazon on their phone.

The Pew Internet and American Life Project  tell us that during the last Christmas period in the US, 52% of shoppers used their smartphones to research products on mobile devices while physically in retail locations. Of those who used their smartphones for online price matching, 19% purchased the product online thereafter.

Currently, it is calculated that overall, 44% of shoppers use their mobile phones while shopping day-to-day (McKinsey Report 2012).This is quite a high figure, and it means this trend is definitely not to be ignored.

So what are consumers doing on their phones in-store exactly?:

  • Visiting the store’s website: 20% (2010) –  43% (2011)
  • Using a Price Comparison App: 37% (2010) – 38% (2011)
  • Scanning Barcode: 15% (2010) – 17% (2011)
  • Using Online Coupon: 17% (2010) – 25% (2011)
  • Visiting another stores website: 32% (2010) – 40% (2011)
  • Photographing product – social recommendations: 18% (2010) – 16% (2011)

McKinsey provided some clever combative tips to go with their data:

  1. Connect Locally: Local Blogs, review sites, and offers targeting your local market to get them into the store.
  2. Make Targeted Digital Offers: Discounts, rewards, or price matching
  3. Mobilize Your Sales Team: Use tablets to help customers and teach them about store apps.
  4. Sell Unique Products: Offer private label merchandise, tailor products to customer groups, and provide distinctive packaging.

McKinsey Infographic Excerpt

These are all fantastic tips. Let’s now spend some time elaborating on how to best incorporate them within your retail space. Take a look at the “Don’ts” first of all. Although these measures may seem tempting for retailers, do not think for a second that consumers, especially the ones that are likely to perform a showrooming action in your store, are less likely to become irritated and leave than to accept your attempt to cull their activities. Do not alienate the Gen Y customer, embrace them, cater to them and use them to your advantage, let them be your marketing tools.

Now, let’s see how to do that, while using the “Do’s” as our guide.

1.   Connect Locally

When it comes to brick-and-mortar stores, people are only going to travel so far. What you have to make sure of, is that those in your local area are engaged. They are the ones you need to ensure firstly, know about you, and secondly, are encouraged to come and take a look. So how to do this. Well, depending on the business type, consumers are likely search online by typing in the product type and the area, e.g. Electronics, Limerick.

Google Search: Electronics Limerick

Get yourself on Google Places, get on Yelp, make sure your website’s SEO is up to scratch. All of these are extremely important for letting people know where you are and what you offer, that is the first step to ensuring local connections. Secondly, as you hear every second of every day, social media is your new best friend (if you do it right!), so take some tips from the experts and really take advantage of what’s out there, look for articles on social marketing and created an integrated brand experience. It is quite product dependant but do have a facebook page with engaging content, images, competitions and offers, local people are always ready to support indigenous business, give them the opportunity.

2.   Make Targeted Digital Offers

Embrace digital, don’t hide from it. If online is the way people are going to interact with your products, then give them something that will feed their online interests while at the same time bringing them in-store. A great way to do this is with digital reward systems e.g. rewarding them with points upon check-in at your store, these can be redeemed as vouchers on in-store purchases.

3.    Mobilise your sales team

As I spoke about in a previous blog entry on Gen Y customers , enticing them in-store may become increasingly dependent on new and innovative technology incorporated into sales strategies. There are some great examples in that article about what people are doing currently but the pool of ideas is ever growing. Tablets, kiosks and touchscreens are a great way of enabling the sales team to interact with customers in a fun capacity. If you have developed an app for your store or you have started using an online loyalty/reward point system, then having your sales team demonstrate how to use it while they are in-store will be a great way to get to know your customer base, give them a personal experience and ensure they don’t miss out on great deals you have on offer.

 4.    Sell Unique Products

It isn’t always possible, and of course much of your stock will be available through online stores, it’s nearly impossible to avoid these days, however, offering a decent selection of private label merchandise is a great idea. This will ensure that what you are providing to your customers is original and unique. Selling unique, good quality products that other stores simply don’t have, such as Lush, will mean consumers will come for what they can’t get at other locations, online or otherwise.  Another good tip is to provide distinctive brand packaging, bags and boxes with interesting twists, they may not encourage someone to pay 20% more if they see on online alternative, but what they will do it encourage high-street shoppers into your store when they see others with one. And of course, as has always been the case, distinctive packaging is an advertising tool in itself.

What we are seeing has come at a time of “the perfect storm”, of the convergence of these optimal conditions that thwart highstreet retail. These conditions are the advancement of technology with the increase in ease and comfort with online, and the dramatic decrease in discretionary expenditure available to consumers due to the global recession. People get comfortable with using the internet, they have far more options as regards online stores, they are mobile, and they have to be price savvy, there you have it, the perfect “showrooming” storm.

What is going to happen in the future is really anyone’s guess, there have been quite a few rather bleak, doomsday forecasts with empty downtown streets full of dilapidated retail locations, but I for one think that with the right attitude of adaptability retail locations can, will, and have to survive. So they do eventually become showrooms for online, maybe having minimal stock, with digital displays and in-store buying capability will be the future! Maybe online retailers will start paying them to endorse their stock in physical locations. One thing to make sure of is that, as a retailer, you are not left behind. Keeping up-to-date with progress in technology, esp. retail technology, and keeping an ear to the ground may just be what saves your business. Showrooming is a reality and taking steps now is the way to by proactive. Don’t bury your head in the sand or alienate consumers.

Advertisements