With Back to School in full swing, showrooming is an issue that many retailers worry about. Even if youre not familiar with the term, youve certainly felt the pain.
What is Showrooming?
Showrooming is when a shopper browses a physical store looking for a product often taking up the time of a more than helpful salesperson and then ultimately makes the purchase online to get a cheaper price or to avoid paying sales tax. While this practice is more than annoying, the more you know, the better you can deal with it.
Showrooming is most prevalent with large ticket items, like appliances or electronics. With a greater chance of a high cost savings, people spend more time researching these types of products. Comparison sites online also help buyers find the lowest price quickly and easily. On the flip side, small impulse or high need purchases tend to invite less showrooming like candy bars, a jar of peanut butter or a stick of deodorant. But its those in between items that you need to address. What about that backpack for your son or a fall coat for your daughter?
How to Fight Showrooming
There are many strategies that you can employ to lower the rate of showrooming. One company in Australia actually chose to charge shoppers $5 just for looking around in the store. The fee would be applied to any purchases made, but this aggressive (hostile?) approach is not what we would recommend. Here are a few more strategic ideas that could encourage customers to make purchases from your company (physical or online store).
Price matching Many stores are guaranteeing price matches to their online competitors. Although this works for large retailers such as WalMart, Target and Best Buy, not all retailers can afford this route.
Customization Customization gives you the opportunity to differentiate yourselves from online competitors and eliminate other options. Whether its the way you deliver a service (i.e. Best Buy including Samsung-branded boutiques within its stores) or customizing a product itself, people like to feel special and customization contributes to that experience.
Technology A recent by-product of showrooming is innovation. With more access to customer information than ever before through loyalty programs, location services and mobile technology, stores can influence customer behavior using technology. Pushing offers to a customers mobile phone when they near your store or using mobile payments to simplify the checkout process are both great examples of how retailers can capture a buyers interest in creative ways to encourage them to buy in their stores.
Service Shoppers still value a good shopping experience so take extra strides to ensure great service within your physical store itself. Have friendly, knowledgeable, and (most importantly) available sales people to demonstrate products, answer questions and help shoppers. Also be sure your store is well-stocked. Out of stock items guarantee that your customers will buy somewhere else and its very likely they will not come back. With the rise of online competition, you also have to consider what type of online shopping experience you provide. Maintaining consistency (items, pricing, branding, services, etc.) across your physical and online channels goes a long way to impress buyers and to simplify the purchasing process. Adding features like buy online/pick up in-store or buy online/return in-store also helps by building customer loyalty.
Amid Showroom Confusion, Service is Still King
Some studies show that showrooming is increasing. While others argue that major retailers are losing fewer sales to their online competitors. But the issue is not that straight forward. What about the buyers who are doing their research at home and then buying online? Those buyers skip the physical store altogether. In those cases, showrooming rates are declining but in-store sales are also declining. The winner in this scenario is the online store.
Researching the strategies above and determining which will help your business is important, but be sure to pay special attention to what is most under your control: service. Especially in a multi-channel sales environment, providing consistent, reliable service will go a long way to giving customers more to think about beyond price. Over the last 20 years of sales training, one thing I was told over and over again was that people want to feel good about their purchase, and price doesnt always give them that satisfaction. Service, on the other hand, always does.