6 Jun 2013

Winning The War On Showrooming

Showrooming. It’s been blamed for the demise of major UK businesses like Jessops and for reduced sales by a string of companies selling everything from fashion and footwear to electronics and books.  It even prompted a Brisbane speciality foods retailer to start charging customers a $5 fee to browse its store, leading to news headlines around the world.

Showrooming is a relatively recent shopping behaviour where consumers visit a store to try out a product and then purchase it at a cheaper price online. It’s been powered by the rise of smartphones which enable shoppers to compare prices and look for a better deal online rather than purchasing a product at the bricks and mortar outlet. In an economy where consumer spending is down and retailers are already feeling the pinch, showrooming has become a major talking point amongst retailers.

According to global research firm TNS, smartphones have become essential shopping tools for a growing number of consumers. TNS recently canvassed 38,000 people across 43 countries and found that 43 per cent read reviews about products while shopping, 31 per cent compare prices across different stores and 25 per cent seek advice from family or friends before making a purchasing decision. Twenty-one per cent of respondents said they use smartphones in store to engage in showrooming behaviour.

It’s clear that in this information-intensive world, shoppers are taking advantage of the technology available to them to better inform and confirm their purchasing decisions. So how can businesses combat this trend or, better still, make it work in your favour?

Offer More Information

Be proactive in providing the information your customers want. A mobile-enabled website will enable you to interact with potential customers when they’re out shopping and position you as a more viable option. You can also use signage, promotional materials, in-store kiosks and even QR codes to keep shoppers informed about product information and special offers. Better still, your own branded mobile app will give customers an easy way to engage with your brand.

Be Willing to Price Match

A price-matching policy eliminates the impetus of showrooming since customers know they can buy a product from you right now for the same price as an online store will deliver. You secure the sale and the customer gets to walk away with the product. It’s a win-win that builds loyalty for your brand because shoppers appreciate that you will go the extra mile to secure their custom.

Deliver an Outstanding Customer Experience

According to the TNS survey, more customers still prefer to engage with a sales assistant than buy online so train your staff to offer exemplary customer service. According to Felim Mackle, sales and service director at UK telco, O2, “Businesses should deliver personalised, engaging and consistent experiences whenever and wherever customers interact with them. It’s clear the public still demands a physical presence on the high street, but it is those that offer a more tailored experience, both in store and online, that will win out,” he said.

Stock Unique Products

One of the easiest ways to combat showrooming is to offer products that aren’t available anywhere else. Not only does this eliminate the threat that customers will find the same product at a cheaper price on a competitor’s website, but unique products will drive more traffic to your store, offering additional opportunities for cross selling and up selling.

Explore New Technology

More companies are exploring the use of mobile devices to enable customer service staff to get out from behind the service desk and into the showroom.

One Australian company achieving considerable success in using technology to combat showrooming is the SE Queensland franchise of furniture and homewares retailer, Vast Interior. Franchise owner, Chad Sawtell has armed his customer service staff with ipads running the Retail Express POS and inventory management solution via a standard browser, which enables them to engage with customers on the showroom floor rather than being stuck behind the counter.

“We work hard to offer shoppers an outstanding customer experience. The Retail Express software is the backbone of our approach because it allows us to answer all their questions about pricing, stock availability and delivery times on the spot,” he said. “The point at which people are most willing to hand over their money is when they see something they like, so we do whatever we can to take the discount mentality out of the equation and close the transaction.

“With Retail Express in our hands, we can take away all the reasons why they might want to delay. You want a different colour? No problem. We have these options available. Can’t afford it? You can put down $200 now and pay the rest off over time. Let me show you how our payment plan works. By answering all their questions right there on the ipad, we can close the sale there and then,” he explained. Sawtell said the introduction of Retail Express on ipads has reduced walkaways by 10 per cent, which represents an extra $100,000 in revenue a year.

One of the biggest benefits has been the ability to do special events like a car park sale or a store-wide promotional discounts night,” he said. “We can walk around the car park, engage with customers looking at the merchandise and punch in the sale on the ipad. It’s fast, efficient and we enhance the experience for customers by giving them everything they need on the spot.”

As online businesses proliferate and showrooming becomes more popular, bricks and mortar retailers must use every tool available maximise customer interactions and improve conversion by delivering outstanding service.

Final Word

Showrooming represents an opportunity because it brings people into your store to look and feel at products they’re serious about buying. By engaging with showroomers and finding ways to convert them on the spot, smart retailers can use this ‘challenge’ to grow their business.

Aaron Blackman is Managing Director of Retail Express