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?

 
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