Based on an analysis of 26,000 respondents in 14 counties, in a presentation at the National Retail Federation in January 2013, Vice President of IBM Global Business Services, Jill Puleri reported that showroomers, those who shop in stores and then purchase products online, comprised only 6 percent of all shoppers. The study also found that 48 percent of all showroomers use the store to research products, yet have no intention of making a store-based purchase. Another quarter of showroomers planned on making a purchase but get "turned off" by high prices, lack of poor sales help, and other factors. These shoppers end up purchasing products online after visiting a store. One-third of showroomers use mobile devices to search prices and find product information in retail stores. That leads us to 5 Brilliant Secrets -- Including Competitor Price Monitoring & Assortment Management -- That Retailers Can Use To Combat Showrooming.
In general, in-store retailers can protect themselves from showroomers by:
1. Competitor Price Monitoring. Monitor the prices of major web-based retailers and either match or come close to their price levels.
2. Stock hard-to-find merchandise assortment. Store-based retailers can also stock hard-to-find exclusive merchandise that is not available through traditional channels. These include private label goods of especially high value as well as high-end merchandise with price protection.
Here's how store-based retailers can react to each type of showroomer:
3. Convert showroomers who use the store to research products, yet have no intention of making a store-based purchase:
• Increase the importance of your firm's Web business relative to in-store sales. Make it easy for Web-based customers to compare features of competing products, read customer reviews, and access reviews in major periodicals. Assume that some shoppers will switch to Web-based purchasing.
• Make the case for in-store purchasing more compelling through price guarantees, home delivery, low-cost extended warranties, and other attributes.
4. Convert showroomers who plan on making a purchase but get "turned off" by high prices, lack of poor sales help, and other factors:
• Study your value proposition relative to Web merchants. Immediacy of purchase, ease of return and exchange, and no shipping fees need to be featured by salespeople.
• Pay better attention to the store environment, customer service, and training of salespeople.
• Make the store environment a fun as well as educational place to shop.
• Edit your selection of merchandise to include top-selling goods, editor's choices, and special values.
• Pay sales personnel by salary, not commission, so they are motivated to recommend a lower-cost alternative to consumers.
5. Convert showroomers who use mobile devices to search prices and find product information in-store:
• Regard mobile devices as a "companion tool” to a store visit rather than as an access point to another retailer's Website.
• Configure a mobile device Website as a means to obtain information on goods in a retailer's store.
• Use mobile devices to help customers find in-store products.
• Offer special sales to mobile device users.
What do you think? Thanks. Barry
Editor's note: Be sure to check out Barry Berman and Joel Evans' latest book: Retail Management, A Strategic Approach.