Showrooming occurs when consumers visit a physical retail store, assess the look and feel of an item, then leave and buy the same product from an online competitor - presumably for a cheaper price. In a recent survey by Smart Company, nearly a third of Aussie shoppers admit to showrooming, while a further 14% say they would have in the past had they thought of it.
Bricks and mortar store retailers need to ensure they are aware of the risks and drivers of showrooming and have systems and strategies in place to mitigate it happening. Here are some of the most effective ways you can combat this trend or, better still, make it work in your favour.
1. Understand the Drivers - Planned vs. Reactive
An important first step is to understand why store visitors are engaging in showrooming. This will allow you set an appropriate and relevant strategy in response. As Swinburne Business School Associate Professor Sean Sands points out in this article, the reality is that most ‘showrooming’ is unintentional – that is, customers revert to shopping online because they couldn’t find a suitable solution in-store or the experience was so off-putting that they abandoned.
Sands says cases of intentional ‘showrooming’ – or price comparison shops – are less common and mainly affect bulk item retailers where products are highly commoditised and high priced (so a reduced price can mean a decent saving). As this blog shows, in-store shopping is still by far the most preferred option over buying online for Australian & New Zealand consumers. This is due to the fact that shoppers perceive they can complete the buying process and get their goods quicker and easier by visiting a store. They can try and buy the same day in-store whereas buying online involves purchasing without touching the products, waiting and paying for home delivery and potentially risking the effort and shipping costs of returning goods.
If bricks and mortar retailers can effectively promote and deliver on the convenience and immediate product availability benefits of in-store shopping then their risk of showrooming is dramatically reduced.
It may also make sense to engage in price matching strategies - particularly if your products are highly commoditised and high ticket items. Even if they aren’t, it can make sense for many retailers to develop some form of price matching policy where price is a considerable part of the product purchasing decision. That way they can minimise the risk of losing a proportion of their sales. For most retailers though, price matching alone isn’t going to cut it - if this isn’t backed up by a convenient in-store experience where stock is available and staff are able to quickly solve all the customers needs then an online purchase from a competitor could win the sale.
2. Deliver an Outstanding In-Store Experience
Engaging, Expert Store Staff
Part of the appeal of the in-store experience is the ability to get expert advice and knowledge from your staff. Store employees need to consistently deliver personalised, engaging and expert service whenever and wherever customers interact with them. So you need ensure that your staff are able build rapport and respond to a wide range of customer queries about each product.
Product Availability, Choice & Unique Solutions
While providing an engaging, entertaining and pleasurable experience is vital, if you don’t present a relevant product solution for what the shopper actually stepped in-store for then you’ll still miss out on the sale. Customers want to try and buy the products today. Having the right product selection available and suitable inventory levels in each of your stores is imperative. But it is still one of the most common failures we see in Australian and New Zealand retail. Understocking results in a drastic amount of lost sales. Effective, data-driven inventory optimisation systems need to be in place to combat this.
If you don’t have the exact item in stock, store employees need to be able to diagnose the customers requirements and present the best alternative product solutions/options for them. Store staff need to be able to ask the right questions to quickly identify their product needs as well as present the correct cross-sell items.
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.
Using Mobile POS to Win The Sale
More and more retailers are exploring the use of mobile POS solutions to enable customer service staff to get out from behind the service desk and into the showroom. In a recent survey, 52.8% of shoppers said they seek out in-store staff that carry tablets meaning they want your team to be equipped with the best technology. Staff can provide a more personalized, one-on-one experience which will also lead to more opportunities for cross-sells and up-sells. A mobile Point of Sale system with intelligent product search and recommendations will empower your staff to quickly hone in on the right options and close the sale. The system will identify suitable alternatives when the shoppers desired product is out of stock as well as identify the correct up-sell and cross-sell items. With an advanced solution like Retail Express, your staff will have access to more than just what's on their shop floor - they can see in real-time what is available in other stores and arrange stock transfers from other outlets for home delivery or store pickup. You could even incorporate in-store screen browsing featuring all inventory across your store network which the customer can then browse themselves and make quick purchases.
3. Embrace Omni-channel
While shoppers still favour in-store shopping, bricks and mortar retailers still need to develop a comprehensive digital presence. By creating a professional eCommerce site, shoppers can choose to visit your store to try the goods and make their purchase online later (if they prefer home delivery or want to make the purchase at a later date). Providing customers with the maximum choice on how they purchase from you is always going to reduce the likelihood that they buy the goods from a competitor.
Shoppers often start their buying journey online, using the web and mobile to find nearby retailers offering the best products and the quickest, easiest way to get hold of them. By offering a well-designed Click & Collect system and Stock In Store function, your prospective customers have a means to ensure a local store has inventory available and visit so they can get the goods they want the same day. This provides bricks and mortar retailers with a means to differentiate and compete against pure-play online brands by offering consumers quicker access and a cost saving on home delivery fees.
4. Provide Incentives to Regularly Return To Your Store
Retailers need to provide a reason to come back. It’s important to entice customers with more than a transactional sell. Offer free service, follow-ups, exclusive loyalty rewards, and add-ons for customers if they return and make another purchase. Advanced CRM, loyalty and marketing systems need to be in place to achieve this.
5. Create a Price Matching Policy - If Appropriate…
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 that 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.
How Vast Furniture & Homewares Is Turning The Tables on Showrooming with Mobile POS
One Australian company achieving considerable success in using technology to combat showrooming is furniture and homewares retailer, Vast Furniture & Homewares. Franchise owner, Chad Sawtell has armed his customer service staff with mobile tablets running the Retail Express POS and Inventory Management Solution, which enables them to engage with customers on the showroom floor rather than being stuck behind the counter.
Sawtell said the introduction of Retail Express on tablet devices has reduced walkaways by 10%, which represents an extra $100,000 in revenue a year.
“We work hard to offer shoppers an outstanding customer experience. Retail Express 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 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 mobile tablet, we can close the sale there and then,” he explained.
Looking to fast track your growth with a smarter POS System? Contact the Retail Express team today on 1300 732 618.