The last two decades have marked incredible changes in retail. Online retailers like Amazon, Ebay and Zappos have thrived. Traditional retailers have had to adjust, many successfully. Office Depot, Walmart, Sears, Best Buy, Macy’s, JCPenney, Target and Gap all show up in the top 25 of Internet Retailers according to Internet Retailer Magazine.
Yet as soon as everyone started to feel comfortable in this new world, everything has been shaken up again. With smartphone penetration quickly passing 50%, a new breed of shopper is emerging. They’re more informed and can virtually shop anywhere. Perhaps the scariest thing is that they have endless options.
Look here, buy there.
This brings us to a new buzzword, “showrooming,” highlighted in a recent New York Times article. It’s the term for customers who look at products in a physical location and purchase the item online, typically at a lower price. The term originates from booksellers hit hard by consumers visiting their stores to browse books, only to buy them from Amazon.
While the publishing industry felt this trend first, they’re not alone. A recent Wall Street Journal article explained that Target has also felt the wrath of showroomers and was concerned enough to send a letter to vendors asking them to help combat the practice, suggesting that “suppliers create special products that would set it (Target) apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform on their computers and smartphones.”
Tackling the problem.
It’s hard to argue with retailer complaints. Why should they foot the bill to create a physical space, display products, maintain inventory and staff, then let online retailers reap the sale? Not fair.
The problem isn’t going away. As phones and networks become more sophisticated, this trend promises to pick up steam. Retailers will once again have to evolve and figure out how they can still be successful.
A few quick ideas on combatting showrooming:
• Don’t forget about the benefits and advantages brick-and-mortar stores provide. Convenience and immediacy are huge. If a customer is in-store holding a product, is it worth the buck or two he or she might save by ordering it online and having it delivered? In many cases, the answer is “no.” Retailers should find ways to promote the benefit of buying now.
• Embrace new digital and mobile technologies. Smartphones can be a threat to retailers, but they also offer a great opportunity. Retailers should consider how to use mobile devices to make the shopping experience more efficient, valuable, rewarding and personal. Provide tools to help shoppers and use mobile devices as a conduit to future communications and sales.
• Test new technologies that can help your reach and support shoppers. A couple of great examples: Tesco recently started testing a virtual supermarket in Korean subway stations. People use their mobile device to scan 2D barcodes on a video screen to purchase products. AdiVERSE is a large touchscreen wall introduced by Intel and Adidas that extends the product range available in-store. This virtual experience lets consumers explore a myriad of products.
Showrooming isn’t going away. But clearly there are ways retailers can minimize its impact and turn the technology in their favor. One thing that never changes is push back from companies whose way of doing business is challenged. I have no doubt that the most successful companies will see this consumer shift as an opportunity to embrace new technologies and evolve relationships.
