Four Ways Retailers Can Combat Showrooming

June 20, 2017
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If you’ve ever visited a store to try on or examine a product before buying it online at a lower price, then you’re familiar with Showrooming. According to a Nielson study of 30,000 consumers in 60 countries, the practice is rampant. An Accenture study puts the figure at 73 percent of active shoppers.

The practice goes both ways. Consumers also do significant product research online before eventually purchasing in a brick-and-mortar location. By many estimates, this is even more common than Showrooming.

Regardless, the possibility that people enter your stores, use your resources, and then buy your products online from someone else is a problem that needs to be addressed, macro trends aside.

This is not something that can be completely fixed. Economies of scale give online retailers a cost advantage, and there will always be people determined to shop on price alone. However, there are steps retailers can take to minimize Showrooming’s impact, and redirect consumer dollars back to the checkout where they belong.

Invest in Technologies and Integrate with Social Media

Digital displays, augmented reality, facial recognition systems, and other experience-enhancing technologies are essential to stepping up your Customer Experience (CX) game and getting bodies into your stores. But to deter Showrooming you must go a step further and design high-touch shopping experiences that drive conversion.

Targeting, interactivity, and ease-of-use can stimulate demand, but if your goods are available online that demand can be fulfilled anywhere. So, the key is to create not just demand, but urgency.

Social Shopping with Phone

That’s where social media comes in.

In its report Navigating the New Digital Divide: Capitalizing on Digital Influence in Retail Deloitte Digital states that:

  • Shoppers who use social media to help shop either before or during their trip are almost 30% more likely to make a purchase that same day.
  • Over 65% of consumers read product reviews online before making an in-store purchase.
  • Consumers who use social media while shopping are four times more likely to spend more than they otherwise would.
  • Shoppers who say they’re influenced by social media are six times more likely to spend more after a digital interaction.

The trend here is clear. When planning your showroom, make social integration a key part of your IT strategy. Make products easy to refer back to online, and have social feedback and reviews featured prominently. If the technology allows, integrate reviews directly into your displays.

You can take it even further and make it easy for shoppers to post items to Instagram, Snapchat, or Facebook, and ask friends for feedback. If they get real-time feedback they’re statistically more likely to convert, especially on impulse buys. Keep narratives in mind when creating shopping experiences, as Story-type posts have spread from Snapchat to nearly every other social platform.

It might seem counterintuitive to direct your customers back to the digital realms just when you’re closing on a real-world sale, but keeping customers offline entirely just isn’t realistic.

(Unless you’re Amazon, of all companies. They patented a technology that allows them to block in-store customers from making price comparisons on their phones. The nerve.)

Go Bespoke: Offer Made-to-Order Items

Last fall on vacation in Australia I stumbled across Melbourne Central, which is a trendy version of your standard shopping mall.  I noticed a crowd gathering at one of the shops, and was surprised to see velvet ropes winding out from the entrance, with people queued around the corner.  What could be generating such buzz at a shopping mall? Tesla showroom, I guessed. New iPhone, maybe?

Nope.

KitKats. Yes, that KitKat…the candy bar from the vending machines.You’d be hard pressed to find a more ubiquitous product, but people were lining up to get one. 

Why? The store was flush with digital displays where you could create your own version of the classic candy bar using “fiery crushed chili flakes, ground roast almond brittle, dried raspberry pieces, golden honeycomb shards, lightly salted caramel popcorn, fragrant pink rose petals, and many, many more.”

None of these products or services are available online. The message here is obvious. Sell things people can’t buy online.  Since people can buy damn near anything online, the best way to do that is to go bespoke (custom-made).

Employing customization tactics like this presents obvious challenges. Not everything is as easy to make as a chocolate bar. Especially on the spot. 

However, 3D scanning and printing technologies are improving every year, and are worth researching, if not to fabricate entire products on-site, then to offer customization, upgrades, or adjustments.

Develop a Bond

Creating a sense of urgency is one path to conversion, but if you can create connection with people -- or better yet a sense of obligation -- you might get even better results. There are several well-established techniques sales and marketing departments have used for years to accomplish this.

1) Do a favor for them. If you’ve ever bought a car, you were probably offered a soda or coffee. If you said yes, the salesperson most likely walked over to the beverage machine, put in money, and got your drink. Seems odd behavior in 2017. Why do salespeople have to pay for drinks when they could just keep a bunch in a fridge under their desk? Well, they don’t.

They want you to see them buying it so you feel a tiny sense of obligation to them. Deep down in your brain you feel like you owe them. 

But can a $1 soda substantially affect the odds we’ll make a $35,000 car purchase? Shockingly enough, it can. That’s just how we’re wired.

2) Ask a favor of them. Strangely, the converse works also. Asking a small favor of someone can make them like you move. It’s called the Ben Franklin Effect, and it's supported by multiple studies. As you can see from the name, it’s an old trick. It’s a well-established phenomenon, and much has been written about it already so I won’t dwell on it here.  In Franklin’s words: He that has one done you a kindness will be more ready to do you another than he whom you yourself have obliged. 

Bust of Ben Franklin

Applying these suggestions is easy, but the savvy retailer won’t be obvious about it. The favor asked or given can be very small, and the process can be somewhat indirect. So long as the customer is aware that it happened, there’s no reason to be aggressive about it. Once you establish that connection, closing on the sale is easier, and people are less likely to walk.

Offer Price Matching

Many large retailers offer Price Matching Guarantees: Target, Best Buy, Walmart, Lowe’s, and Home Depot all offer significant reductions if you can show them a lower price from a reputable retailer.  Some even match Amazon. For smaller retailers, the value of price matching is a highly individualized question based on brand, market, margin, and a complex web of other variables that make up a sound business case.

Even with the largest retailers, the price matching programs are complex and vary wildly from company to company. They also change over time. A few are active only during holiday seasons. Some only match nearby brick-and-mortar stores, and others won’t match sale items. It’s complex and confusing for customers. And that’s not an accident. The most profitable Price Matching Guarantee is the one that isn’t used.

Smaller retailers should tread carefully here. Competing on price is rarely advisable, especially for companies that don’t work at scale. 

Wrapping Up

If a shopper is determined to get the lowest possible price, there’s not much anyone can do to stop them. But most of us make purchasing decisions from a matrix of influences of which price is just one. The retailer’s role is not to just sell the product, but to sell the product now. That second layer can be a challenge, but it's ultimately within reach. If Deloitte Digital's Digital Divide report made anything abundantly clear, it's that connections are the central component to driving in-store sales, be they social, technological, or interpersonal.

Tim Flavin
Chief Marketing Officer
Email |
tim.flavin@istservice.com
LinkedIn |
https://www.linkedin.com/in/timflavin

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