How to Beat Showrooming
Forty percent of Americans have showroomed, or evaluated a product in-store only to purchase it online later, typically at a lower price, according to research from Harris Interactive.
Some large retailers have implemented price-matching policies to offset such competition. Others, such as a Vera Wang bridal boutique in China, have resorted to more drastic measures. The Vera Wang outlet charges brides-to-be $482 to try on gowns for 90 minutes.
That's even more dangerous for retailers than showrooming. More than 80 percent of Americans in a recent Harris poll said they were not willing to pay to examine products in-store. "People will not pay for...an opportunity to browse in a store. Retailers may be trying to get revenue, but this is definitely not the way to do it," concludes Regina Corso, senior vice president of the Harris Poll.
Retailers that fight showrooming the right way will consider that a majority of showroomers—57 percent, to be exact—would be willing to purchase from brick-and-mortar stores that have a permanent price-matching policy in place, according to the Harris Poll. Consumers would also be willing to place orders online and pick up their products in-store: Fifty percent of Americans have done this already.
When asked what would keep them from showrooming, 84 percent of consumers cited in-store sales and discounts, according to Corso, "so [retailers] need to show they are the lowest priced." This, she adds, embeds in shoppers' minds that the brick-and-mortar store is the place to go for the best deal.
Other retailers have used the very vehicle that poses the greatest competitive challenge to their revenues: the Internet. Customers view a company's Web site or mobile application as an extension or complement to the brick-and-mortar store. Therefore, for traditional brands to succeed in the race against online mega-shops such as Amazon, the more seamless the experience between online and in-store buying, the better.
Retailers need to improve the overall quality of their Web sites and build in cross-channel purchasing capabilities. According to a survey of 2,000 consumers by OnePoll Market Research, 75 percent of shoppers abandon online purchases because of inadequate search capabilities. Additionally, 49 percent would abandon a purchase if checkout takes too long, and 62 percent were "annoyed" when asked to repeat purchase information to a customer service rep after previously entering the same information online.
To drive shoppers to their e-commerce sites, brick-and-mortar retailers need to design their sites from the shopper's perspective, noted James Fong, a product manager at IBM, during the IBM Smarter Commerce conference in May.
Another important step is to match any e-commerce site with shoppers' goals. For instance, a retailer might want to push a certain number of products that it needs to turn over quickly; however, this is not always the best option, as bombarding consumers with images and text could overwhelm them and slow down the Web sites.
Retailers also need to look at shoppers' cross-channel interactions with the brand over time, Fong said. This means taking into account purchase and return patterns and the duration and frequency of visits to the store and the Web site.
"If you accept the fact that [showrooming] is here, that's going to be a huge [differentiator for retailers]," Corso says. "Like [with] Best Buy, [sometimes] customers buy online because they don't want to carry their purchases home...so if Best Buy can make it even easier for them to do it right from their phone or in-store, and make sure their Web presence is where the showroomers are going to create brand loyalty, that's going to help a lot."
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