It started innocently enough. A consumer went into a brick-and-mortar retail store, found a pair of shoes she loved and was prepared to buy them. That is, until she took out her smartphone, clicked on a few websites, and found a better deal somewhere else. Sound familiar?
It’s no surprise that the evolution of technology and the recession have contributed to the rise of showrooming, where vigilant, deal-seeking consumers are leveling the price playing field. It’s also no surprise that retailers are feeling the impact of showrooming.
Adding to this is the continued growth of e-commerce. In fact, comScore’s U.S. Digital Future in Focus 2013 report found that e-commerce growth is outpacing brick-and-mortar retail stores by a factor of approximately four. Add to this the data from Bain & Company (pdf), which found when online sales within a particular category reach the 15-20 percent level, that category is at risk of losing its brick-and-mortar presence.
Should we worry? Only if we’re not taking steps to accommodate showrooming and the online-to-offline experience.
Since most Marketing Land readers have either a pure online presence or a combination of online and brick-and-mortar outlets, in this column we’ll explore what you can do to better acclimate to the world of showrooming.
More specifically, we’ll take a closer look at the following:
Types of showroomers
What retailers can do to accommodate the growth of showrooming
How to successfully integrate the online and offline experiences
Who Are The Showroomers?
They’re likely to be you or me or someone you know, since a recent Harris Interactive poll found that 40 percent of Americans have showroomed. And they show no signs of stopping, as IDC Retail Insights estimates the number of showroomers will continue to rise, from 59 million in 2013 to 78 million by 2015.
But not all showroomers are alike. A recent study by Columbia Business School and loyalty management company Aimia classified the five types of showroomers. They are:
Exploiters, who have no intention of making a brick-and-mortar purchase. Their sole purpose of entering a retail outlet is purely to conduct research.
Savvys are those smartphone whizzes that are able to whip out their mobile devices to quickly compare prices, find deals, and even execute the purchase on their phones.
Price sensitives are those that are more likely to respond to deals presented to them in stores such as an extended warranty or loyalty points.
Experience seekers are the consumers that flock to retail stores specifically for a sale or an event. This slice of the showroomer audience will make a purchase from their mobile device only if buying in the store is inconvenient.
Traditionalists actually prefer to shop in stores and use their smartphones to text or call a friend for advice before they make a purchase.
Why Do They Do It?
Well, price is the obvious answer to the question of why consumers engage in showrooming. However, out-of-stock products or the convenience of having an item shipped directly to their homes are also incentives for consumers to showroom.
Yet don’t be too quick to assume you’ve lost a sale the minute a shopper starts to explore their options. After all, if they’re on your website or in your store, you have the opportunity to create a great experience that not only helps close the sale, but also leads to stronger customer loyalty.
What’s A Retailer To Do?
Some retailers have reacted to showrooming with tactics that might otherwise not have been part of their strategy. For example, some drastically reduce prices to compete and some increase their inventory of private label goods to create unique value in-store. But the threat to profitability from the first strategy, along with consumers’ tendency to shop for specific brands, mean that these approaches don’t have longevity.
Smart retailers accept showrooming as a fact of life and enhance customer shopping experiences holistically. This approach can stay on-brand and maintain margin. Here are five ways to do it.
1. Guide the research and decision process. The customer journey typically begins with research conducted online including viewing consumer reviews and ratings. Retailers should look to add those elements on their websites and in their stores so potential customers can have all the vital information in front of them as they make their decision.
After all, the consumer is going to look up this information anyway, so why not streamline the process for them? This approach will help establish your business as a trusted brand in that consumer’s mind.
While some retailers fear that putting all of this information in front of the shopper could drive some consumers away, remember that if a customer is already on your website or in your store, you have an opportunity to close the sale, which brings us to point number two.
2. Train sales associates to present fair and unbiased information. This can be done through online chat or by equipping in-store sales associates with tablets so they can show consumers information in person. Adding a human element to the shopping experience can go a long way toward closing the sale. To further increase the likelihood of the sale, consider point number three.
3. Once you’ve established that support via information and people, cultivate longer-term customer relationships by offering additional product support services, training classes, awesome return policies, loyalty reward programs, or in-store incentives. Along with boosting conversion, this also enhances loyalty, therefore driving future sales.
Successfully Integrating The O-To-O Experience
Using technology to integrate online to offline channels, you’ll be able to form closer ties to customers by picking up the conversation where you left off, regardless of where that last interaction took place. Four ways to do this are:
1. Online-Offline Integration: Launch a campaign that simultaneously uses a variety of offline and online tactics and channels such as card-linked offers, printable coupons, geotargeting, and social media engagement, for example. Be sure that each tactic contains a unique URL or QR code to specifically identify the path to purchase.
2. Compelling In-Store Offers: Brick-and-mortars can offer free Wi-Fi that requests a customer register when they’re onsite. Along with being able to present compelling offers, this also allows you to analyze in-store Web traffic to determine which products are most vulnerable to showrooming. Registering may seem like a lot to ask, but for free Wi-Fi and additional perks or value, consumers will oblige.
3. Personalized Customer Outreach: Tap into big data and use attribution models that include the various online and offline customer touch points. This allows you to better understand your shoppers, personalize the outreach, and track the effectiveness of your campaigns. Be sure to include mobile, smartphone and laptop shopping experiences as well as campaigns that intersect the various marketing channels such as search, affiliate, and display.
4. Affiliate Marketing: Take advantage of the expertise in the affiliate channel. It’s a great, low-risk way to augment your marketing team and decrease your learning curve when it comes to trying out new ways to reach your audience and better understand the dynamics of O-to-O.
The reality is showrooming is here to stay. We can either embrace this reality and use it as inspiration for creating even more compelling online and offline customer experiences, or we can lose out on a bigger piece of the $262.3 billion that eMarketer predicts will be spent on U.S. retail e-commerce sales this year.
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