I remember a few years ago listening to a book vendor at a learning conference complain about the fact that no one was buying books anymore.
Instead, she said, they’re taking pictures of the covers and then ordering them online or as e-books.
I later learned that they call this behavior “showrooming,” the practice of examining merchandise in a traditional retail store and then buying online, sometimes at a lower price.
Credit: Tom Fishburne
Because online stores often have a lower overhead cost, they can usually offer substantial discounts to consumers for the same product. People like to browse the shelves, and both see and touch what they are buying.
How are store-based retailers to combat this threat to their businesses?
Showrooming is prevalent; a 2012 comScore study reported that about 35 percent of all U.S. consumers engaged in this practice, while in 2013 an Accenture study showed that the number had climbed to 88 percent. The Accenture study of 750 respondents is full of lots of other relevant statistics on shopping and showrooming.
Many people would conclude that in-store retailers will have to match prices with online retailers for the same product.
But, as Jordan Markowski of DX3 Canada says, “price-matching isn’t a solution to showrooming so much as it is a temporary Band-Aid. With the myriad of additional expenses physical retailers have, matching the efficiency and skeleton-overhead costs of pure-play eCommerce retailers just isn’t a long-term cure. It’s just not nearly as workable for smaller-sized retailers with slimmer profit margins, to begin with.”
The problem is complex. Here are a few of my observations on how in-store retailers can combat showrooming:
1. Keep Information Up To Date
Many customers want lots of information before they buy a product, not necessarily the lowest price. Often it is hard to find informed staff who can answer your questions about the product you are looking at. Retailers need to put up interactive displays using tablets that are updated with new information on the products on the shelves nearby.
2. Your Divisions Must Work Together
Most customers want an integrated and seamless experience shopping from the same trusted retailer and don’t think regarding online and in-store competing. This means that large retailers will need to make sure that the two sides of their operation work together so that customers do not perceive them as separate entities.
3. Let Customers Get What They Want Quickly
Customers want their stuff fast–offers of free shipping often hide the truth that free shipping usually means a wait of one or two weeks, and to get next-day shipping, they will have to pay a premium. Instead, customers see the words “free shipping” and order online. There are things that in-store retailers could do to educate customers about the real cost of the items they are purchasing.
4. Build Relationships
Customers still value human relationships from authentic, trustworthy people. For example, I frequent my local independent bookstore because of several staff members who know my name and discuss the latest books they think something might interest me in when I arrive in the store. I go to the bookstore partly because I want to support them, so they remain in the community I live in. Relationships are important.
5. Focus On Consumer Experience, Not Just Price
Price is important, but for most customers, it’s not the most critical factor. But it is better to add value and superior customer experience while the customer is in the store than to just slash prices or always try price matching.
6. Don’t Make Customers Wait
Picking up items ordered online in stores gives retailers another chance to sell something to the customer as long as someone does not do it under any pressure. Customers are in a hurry and appreciate being able to call a store or to access it online, and then pick up the item on their way home from work, for example. What customers rarely want is to wait for the things they desire. In-store retailers need to use this.
In the long run, I think that Canadian retail expert Doug Stephens, author of The Retail Revival (Wiley, 2013), is right when he advises to “revitalize the in-store experience to combat showrooming.”
Turning stores into digital playgrounds that both are rich in information and enchanting inexperience are the place to start.
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