August 23, 2012

Major Retailers Find Themselves Turned Into Showrooms

Last weekend, the main television in my house was on the fritz, so it was time to upgrade.  Like many modern consumers, I turned to my laptop to research alternatives, and made a short list of television models to consider.  I then pulled out my iPhone, did a search to locate the closest retailer and headed out to make my purchase.

After arriving at the store, I headed back to the TV department and, again using my smartphone, pulled up my list and checked out my choices.  In the not too distant past I would have been the only one checking their phone while looking at product choices, but today, I was one of six different people  in this area of the store doing so.

Then it hit me: we were all showrooming.

Showrooming is the new term to describe customers, like me, who go to brick and mortar stores as a part of their purchase process, check out products in person and then use mobile devices to find the best prices, many times leaving the store to complete their purchases.

I found myself paying close attention to what these other consumers were doing.  Walking around, looking over shoulders (and getting some odd looks in response), I found that the majority of my fellow “showroomers” were doing some comparison shopping, although two of them were also checking reviews.  More importantly, all of these would-be-purchasers were ignoring or waving off the staff who attempted to assist in closing the sale.  For the most part, these young workers seemed at a loss for how to address these mobile-armed shoppers and drifted off to help other customers.

As I watched, two of the customers made purchases on their phones and left; apparently they found a better bargain than was to be had in the store.

New research from GroupM Next shows that showrooming is increasingly becoming a phenomenon, with almost 44% of consumers using mobile to shop in-store.  Not only are consumers using mobile devices to check products, they are comparing prices and those comparisons are pulling them out of the store.  According to the research, even a price saving of just 2.5% will pull 45% of customers out of the store, a 5% savings will pull out 60% of customers and a 20% discount will draw 87% of customers out of the doors.

After the first two customers in my “group” left the store, an enterprising young sales associate, fully armed with an iPad, approached my fellow showroomers in a different fashion.  He engaged them with information on the models they were standing near, pulled up reviews and even (gasp!) pulled up comparison price sites along the store site.  In each case this associate came down on the shelf price of the TV to within a few points of the lowest online price or offered some other value-add that the customer could not get from the online competitor.

I was amazed at this salesman’s initiative, as were the other “showroomers” who each stayed around long enough for this associate to speak with them.  In each case, the customer made their purchase in-store instead of online.

This employee represented exactly how retailers need to approach the local showrooming trend.  While shopping is still a predominantly local experience, it is no longer limited to local merchants.  Local retailers have to be cognizant not only of what  their fellow local merchants, but they must also raise their awareness level of online competition.  For retailers to succeed in a showrooming world, they must have a strategy and offer in place to combat the potential of customers leaving the store strictly on the basis of price.

As for me…well, when the associate got around to speaking to me, I had already made my purchase.  The store’s online site was running an “online only” special on the model that I wanted.  While in the aisle, I completed the purchase, scheduled  in-store pickup and was able to walk out with my new television within 15 minutes.


I wonder how that counts – as an in-store or online purchase?

Categories: Uncategorized

August 9, 2012

Foursquare Evolves Beyond the Check-In

When you are married with three kids a date night becomes a luxury for which you seldom have time. I, therefore, always take advantage of opportunities when they are presented, like last weekend.  Given its rave reviews, we decided to see “The Dark Knight Rises.” When we got to the theater, I pulled out my iPhone and checked-in using Foursquare, as I always do. Fast forward – the movie was excellent and I highly recommend it. As we exited the theatre, I pulled out my phone again to check out nearby places to eat, once again turning to Foursquare.  This time, however, as I opened the explore tab, I was greeted by something new.

A local restaurant, just two blocks away, apparently discovered that I was in the area and let me know that two of my friends had eaten there recently and liked it. In addition, they notified me of a current special they were running.  This combination of social recommendations and an offer were enough to get us in the door, allowing us to have an excellent meal after our excellent movie.

Welcome to the world of Foursquare and its local updates and promoted updates.

Since its launch three years ago, Foursquare now has more than 20 million active monthly users, 1 million verified merchants and over 2 billion check-ins.  Foursquare has amassed a bank of consumer data that has few rivals. For years merchants have had access to that wealth of information including granular data such as male/female demographic breakdown, frequent customers, time since check-in, etc., but have had no viable avenue for utilizing it with the exception of large, blanket promotions.

Foursquare is changing that and giving merchants two new extremely powerful tools.  On July 18, Foursquare announced Local Updates which allowed business to contact their customers directly, offering deals and incentives to those who have expressed interest in the business through check-ins or other comments.  A week later, the company announced Promoted Updates, which allows businesses to push out recommendations to potential customers that are essentially advertisements to a mobile consumer base.

Foursquare is positioning this as a Google search-type tool.  When conducting a “regular” search a person inputs a query, showing their intent, which is replied to with relevant search results.  In similar fashion, a Foursquare user is expressing intent by opening the app and going to the “Explore” tab to find information relevant to what is around them.  This is a large step forward in contextual marketing that uses social data to customize communications to consumers.

Both of these update tools show that Foursquare is serious about monetizing its platform and is very well positioned to do so.  Brands and consumers can expect to see further moves from the app-centered around consumer targeting.

The age of hyper-local consumer targeting is here and Foursquare is among the leaders of the pack in providing customized communications options for businesses.

Here are a few things brands, especially national retailers with large local footprints, should consider:

  • Customizing communications to consumers on this level will drive foot traffic to local stores
  • Offering specials and discounts through Foursquare limits losses that can be experienced through “normal” couponing/discounting sites
  • Engaging on the Foursquare platform opens door to a wealth of social data surrounding brands and their locations

Foursquare has shown that it is a viable platform for reaching consumers and engaging them on a local level.  National brands need to enter into that field through localized, contextual offers and communications or risk losing consumers to the businesses that do.

Categories: Mobile social media