Tuesday, July 31, 2012

How To Outsmart Showrooming


Showrooming Definition: Making a purchase on the Web 
after looking at the same merchandise in a bricks and mortar 
store.  Showroomning is similar to receiving help from a 
in a small store and buying the same item at a lower price 
in a big store.

There is a myth that showrooming is only happening in big

Box stores like Best Buy and Costco. The truth is that
Showrooming is happening right now in your store.

Customers are in your stores price shopping your products 

and walking out of your store empty-handed. Below are various 
strategies to outsmart showrooming.

Amazon: Your Arch Nemesis












Amazon is the brainchild behind showrooming, last year they 

launched a mobile app called “Amazon Price Check” which allows 
customers to scan an item in a bricks-and-mortar retailer and compare 
the price with Amazon. Since Amazon is an online retailer, buyers do
not have to pay sales taxes, which can save a decent amount of money 
when buying big-ticket items


In-Store Marketing








Now is not the time to be subtle or bury your head in the sand. Your 
customers are price shopping in your store. You need to attack 
showrooming head-on with aggressive in-store marketing. Let your 
customers know that you will beat online prices, guaranteed. 
recommend posting your signs throughout the store, especially at 
eye level before customers exit your store.

Reward Customer Loyalty











Staples does a great job rewarding their customers with their 
rewards checks-- which are cleverly disguised as bounce-back 
coupons. I belong to a lot of rewards programs and, in my opinion, 
Staples does the best job creating perceived REAL value. Is your 
rewards program creating loyal consumers?  

Employee Service That Breeds Loyalty













Online buying is like commodity trading: you want the best deal
and that’s it, no emotion or engagement.  However, traditional
bricks-and-mortar shopping is emotional and includes the valuable
human element.

Brick-and-mortar retailers need to train and empower their
employees to create memorable customer experiences. Pay attention
to your employees’ verbal and non-verbal communication and watch
how they engage with your customers. As a manager,  spend time
outside and watch your customers as they leave your store--are they
smiling?

Fight Technology with Technology
                                                                                                 
















My last piece of advice for retailers is to offer your customers 
mobile alternatives to showrooming. Jump on the Shopkick® 
bandwagon which rewards customers for in-store shopping
and last year generated $110 million in revenue for their retail 
partners. The RetailMeNot® app is another smart mobile option 
which offers customers mobile coupons.

What smart solutions have you implemented to battle showrooming?

6 comments:

  1. You'd better brace yourself if you post an online price guarantee. You could end up selling a lot at 10% over cost and when word gets out, your gross margin could really drop. Just be prepared.

    Why game your customers? Lower your prices on merchandise and sell your service via memberships and other means. See an example at reinventbestbuy.com

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  2. Great point Dennis. However, it seems to be the primary strategy amongst retailers. Creating a unique customer experience is a great suggestion.

    My friend Chuck added his two cents & and recommended that private labels are also a great strategy!

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  3. Hi Heather - great article! I would also add that interactive POP marketing can play an important role in driving consumers to a retailer's website (via QR codes, NFC, etc.) vs. somewhere else. Consumers showroom for a variety of reasons (model, color, etc.) in addition to price. POP still drives 70% of purchasing decisions in some categories. Interactive POP can help keep them in the retailer's ecosystem.

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    Replies
    1. John great point and totally agree - did you happen to see the article today that came out about Targets holiday campaign leveraging QR Codes in-store to feature the top 20 holiday toys! Target and Best Buy have also unqiue sku codes to prevent showrooming but where there is a will there is a way. It is getting interesting!

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  4. This is such a GIANT issue. Thanks for tackling it head-on and with straighforward clarity. While many online sellers offer outstanding customer service, there is still an advantage to selling with eye contact and that engenders.

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  5. Jim - Thanks for chiming in!I think 2013 will be a break out year for bricks and mortar, as they now have a stronger handle on dealing with mobile solutions/social media. We will see more in-store marketing that addresses showrooming, increased investments in employees, enhancement in the customer experience, more private labels . . . bricks and mortar is starting to give showrooming a run for their money. One thing is for sure competition will make every retailer stronger

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