Much as price intelligence isn’t necessarily propagating a race to the bottom, Showrooming (customers trying out products in store and then purchasing for a lower price online), doesn’t necessarily have to mean lower sales for brick-and-mortar retailers.
Showrooming has sparked a wave of concern amongst many brick and mortar retailers, and some stores have started implementing defensive techniques to prevent customers from checking prices online. But do retailers have cause for concern, or are these aggressive techniques causing them to lose customers?
A recent study done by Deloitte concludes that consumers’ in-store mobile activities may be increasing in-store sales, as smartphone shoppers are 14% more likely to convert and make a purchase in the store than non-smartphone users. Customers are using their phones to look up additional product information and reviews that may convince them to actually purchase.This means that prohibiting the consumers from scanning products may, in fact, cause you to lose sales, as those customers cannot find the information they’re looking for (not to mention the fact that they can still find the information on Google, they’ll just be more frustrated).
A related example that furthers this argument is the use of price checker widgets on online product pages. These widgets allow customers to see the prices at competing sites right on the product page and as a result make them less likely to leave the retailer’s site to price check, and consequently increases conversion and customer loyalty. In fact, according to e-tailing group, 78% of customers are likely to return to a site that offers price checking on the product page, and 53% would no longer leave to site to price check elsewhere.
However, regardless of the statistics above, the fact remains that some customers are still purchasing products from cheaper online retailers such as Amazon, and consequently, brick and mortar stores need to find a way to encourage shoppers to shop in-store, while still allowing them to access the information to help them convert. The key lies in finding ways to add value for your customers.
Here are our 6 tips to overcome Showrooming:
1. More in-store information: Following in the footsteps of Apple, retailers can implement a Genius Bar type strategy that gives consumers access to knowledgeable staff that can help them with product information and selection. Furthermore, it allows retailers to build a personal relationship with their customers. Similarly, TigerDirect added kiosks in their stores that allow customers to find additional product information and product reviews quickly and conveniently.
2. More convenient delivery: Some retailers such as Best Buy are allowing customers to order online and then pick their purchases up in store, allowing customers to get their order more quickly as it doesn’t have to be shipped. Other stores such as the Container Store are even implementing drive-through customer service centers, where customers can pick up their orders without even getting out of their vehicles.
3. Considering the total price: Consumers are more concerned about the total checkout price than the individual product prices, meaning that although a product may be cheaper online, the total with shipping may exceed the in-store price. Knowing what your online competitors are charging for shipping, information often provided by a price intelligence solution, can help you optimize your prices.
4. More Convenient Payment Options: Some retailers are trying to make it more convenient for customers to purchase products in store. Best Buy for example is providing customers the option of paying on the floor to avoid check out lines and Walmart is giving customers the option to order their products online and pay for them in store, allowing them to pay with cash or debit, a convenience online merchants cannot offer.
5. More convenient returns: Although no retailer wants to see products returned, offering your customers the option of returning a product (bought online or off) at a brick-and-mortar store has 2 advantages. 1) Making it more convenient and less expensive to do returns if they have to 2) giving you an opportunity to sell further products to them.
6. Offering exclusive products: Offering products that only you sell (house brand or private label) is a great way of ensuring that customers have to purchase the product from you. Price intelligence solutions can provide you with prices for similar products that your competitors are selling to enable you to price your house brand products accordingly.
There are many ways to overcome showrooming and win the war (some better than others), but when it comes down to it, price and perceived value are still the biggest purchase decision influencers, which is why it is so important to not only provide your customers with value added services, but to make smarter pricing decisions based on the best pricing information as possible.