How To Embrace Showrooming To Your Advantage
Showrooming continues to be a common practice with shoppers these days. Here’s how it works. The consumer:
– Drives to a local retail location that sells what he/she wants to buy
– Investigates the product that they’re interested in
– Checks prices online at other retailers’ websites via search or by simply scanning the product’s barcode
– Purchases the product from an online competitor for less than the store he/she just visited
It’s another way that smartphones are fundamentally changing our lives. And showrooming is not rare: in a marketing study as many as 45% of consumers said they’d leave a brick and mortar store for a discount as low as 2.5%.
Showrooming became a major issue for retailers when Amazon released an app called “Amazon Pricecheck”, which allowed app users to scan a product in-store and check Amazon’s online prices. In addition, Amazon gave app users a 5% discount on the product they scanned. The initial response of retailers was to aggressively combat showrooming. Best Buy responded to showrooming by changing their product barcodes to prevent customers from scanning them. Target stopped selling Amazon’s Kindles in response to the Amazon price check app.
Did it stop showrooming? Of course not: declaring war on showrooming does not work. All Best Buy and Target proved is that overly aggressive responses, even if effective, upset consumers. Even consumers that don’t do in-store comparison shopping voiced outrage over the “insulting” tactics. Plus, there are a many other apps and search tools such as RedLaser and Google shopping that facilitate price comparisons along with customer reviews.
The problem is not that customers are able to check for less expensive products. Consumers were doing that long before smartphones came along. The real problem is that customers have reduced your brand to a product and a price. Few companies can compete on price alone.
There are immediate steps that you can take that have proven to lessen the impact of showrooming and they include:
– Allow customers to order online and pickup in-store. This helps retailers greatly improve customer service and turn their stores into powerful assets that pure e-commerce retailers can’t match.
– Mobile apps. Create a useful mobile app that enables product browsing, access to reviews, offers incentives, and shows product availability in-store. Ideally, your app should also allow online shopping and pick-up with quick turn-around-times.
– Available product selection and inventory. Keeping inventory levels for in-demand products is also key and fuels the consumer’s demand and need for immediate access or gratification at a reasonable price.
– Exchange/return policy and extraordinary customer service. Customers may prefer to buy in-store even at a higher price if you offer great customer service and a fair exchange and/or return policy. Again, it’s about convenience and service for consumers who are already in your store. Offer customers an amazing shopping experience and turn showrooming shoppers into repeat and loyal customers.
– Provide consistent pricing and promotions. If consumers know that they’re getting the retailer’s best price in the store, it’s far easier to complete the transaction immediately – instead of shoppers going home to research prices or look for better promotions.
In the long term, retailers need to differentiate their brand and customer service so that consumers see them as more than just a product and a price. Nowadays there are many other apps and search tools such as RedLaser and Google shopping that facilitate access to price comparisons along with customer reviews. Businesses must focus on the customer experience, align their brand with socially and/or environmentally responsible causes, encourage shopping local or at small businesses, create customer loyalty programs, empower workers to provide superior service, and offer unique products and/or services.
Here are a few examples:
– Apple offers great products, amazing customer service, and available inventory.
– TOMS’ customers feel like they’re changing the world with every purchase of their unique products.
– Dicks Sporting Goods created an app with links to online videos about their products. It creates such a rich shopping experience that consumers may not bother looking for a better price.
In the meantime, any small business or big-box retailer who continues to think it can thwart showrooming without stepping up their game may continue to struggle, lose loyal customers and their competitive edge.