Ecommerce and Retail, Retail

How Retailers Can Prevent Losses From Showrooming

Retail Showrooming

Walk down the aisle of any brick-and-mortar store and chances are, you will see a shopper with their eyes locked on their phone. They may be comparing prices on Amazon, asking a friend for a recommendation, or looking up information about a specific product, but there’s no doubt that mobile devices have become part of the physical retail experience. In fact, more than 90 percent of shoppers use smartphones while shopping.

The rise of mobile devices has led to the emergence of showrooming, which is when a shopper looks at a product in a physical store but buys it online. According to a Harris poll, nearly half of shoppers—46%—showroom. As this practice gained momentum, it set off doom and gloom predictions about how it would destroy physical retail.

The showrooming apocalypse may not have happened yet, but that doesn’t mean physical retailers are not losing business to competitors. Consumers are not going to stop using their phones to assist them as they shop. Today’s shoppers are price sensitive and want to know that they are getting the best deal. Rather than trying to ignore or fight against mobile devices in-store (which is an exercise in futility), retailers should strive to ensure that when a shopper uses a mobile device in-store, they use the retailer’s own app, instead of someone else’s.

Approoming – The In Store App Based Price Matching

We are familiar with Showrooming and its inverse Webrooming – where a shopper finds an item online, but eventually buys it in a store.  Both rely on a shopper finding an item in one context but making a purchase in a completely different context. But what if retailers treated their app as an extension of their showroom and encourage shoppers to engage with the app when they are in-store. As mentioned above, the main reason a shopper indulges in showrooming is to see if they can get a better deal at a competing retailer or get better service. Retailers can avoid losing business by integrating a price comparison and/or price matching feature into their own app, which prevents shoppers from looking elsewhere to make their purchase – no matter which channel they find the product.

For example, price matching is a big issue for electronics retailers. People go to a store, find the TV they want to buy, then they check on Amazon or Costco to see if they can get a better deal on it. What they may not know is that the retailer may also have coupons, offers and loyalty rewards available that would price the TV below the competition, a fact that is lost when using the competitors’ browsing tools. Absent of any specific offers, the retailer may also have a price match guarantee, but it requires an associate to see proof that the product is available for a lower price from the competition, then they need to fill out some paperwork so that the new price can be reflected at the time of checkout before allowing the customer to purchase. There is considerable friction involved, for what would be a price match the retailer would give the shopper anyways. By using the Retailer app to automate price matching, the whole process can happen in seconds – the shopper uses the Retailer’s App to scan the product and see the price it offers to them after having matched it with online competitors, the new price automatically gets added to the shopper profile, and gets assigned to them when they complete checkout.

Communication is key here. Even if a retailer offers a price comparison feature, it’s moot if shoppers don’t know about it. Brands have to invest in raising awareness about their apps’ functionalities so when shoppers have the impulse to showroom, they Approom instead, and stay within the retailer’s ecosystem.

The Game of Stores

Once shoppers are brought into the mobile environment, perhaps through successful webrooming, there are so many other ways retailers can connect with them. You can ask shoppers to scan items and gamify aspects of the in-store shopping experience. Surprise pricing, instant price offers, and dynamic offers based on that specific shopper keep shoppers excited and engaged.

Furthermore, app engagement gives retailers greater insight into who their shoppers are. Imagine that a user comes into a store, scans an item, and get a special price that changes by the time of day. The more people that use the app to scan items, the more information retailers get on their customers. And customers don’t even have to make a purchase to scan. They could earn loyalty points, which in turn creates a series of breadcrumbs for items inside the store. Retailers can use that data to understand what the hot items are and what customers actually buy. If there is a particular item with a low conversion rate, the retailer could run analytics to figure out why. If there is a better price at a competitor, the retailer can use that information to reduce their own prices, and thus stay competitive.

Bundling

Another way retailers can prevent losses from showrooming is by bundling items. Items in-store could be bundled with items that are not carried in the store, but that would go well with that item. If someone bought a dress, the bundle could include a pair of coordinating shoes that are available exclusively from the store’s central warehouse. Or if someone bought a pair of shoes, the bundle could include socks – some varieties of which can be fully customized to the shopper’s preference, and shipped to their home. Apps are a great opportunity to create the ideal package for customers, and in doing so, not only increase sales, but also reduce costs by limiting the SKU’s that are carried in store versus at a centralized warehouse.

Furthermore, bundles can be extended to include local businesses and partners that offer unique products and services that go well with the retailer’s own goods. Consider a sports retailer. If a customer is trying to buy a set of skis, the bundling feature in the app could help guide them through the decision process by recommending what kind of slopes the skis are best for and even suggesting packages for a ski weekend. Third party partnerships that allow retailers to offer a package deal create a competitive edge that is more beneficial to a shopper than just buying one thing.

The Omni-Channel Cart

Lastly, retailers can avoid showrooming losses and enhance the benefits from approoming by creating an omnichannel cart. Essentially, the in-store physical cart and the online cart should become one. Moving between online and offline should be a seamless experience and customers should have options at their fingertips. These days BOPIS (Buy Online Pickup In Store) is all the rage. But the experience breaks once in store, as the shopper may find additional items they want to buy, but now need to stand in line twice to get those items. Ideally, they should be able to Webroom their way to a BOPIS, then come to the store and find additional items they want, add them to their physical cart that is powered by the Retailer’s App, and then complete the checkout for the BOPIS and In Store items with a single click, at a unified checkout station.

In The End, Customer Experience Matters Most

The physical store is becoming an experience of its own—just look at how many online-first retailers are opening up brick-and-mortar locations. Shoppers want to experience the touch, feel, look, and smell of products and don’t really worry about the channel. Competing with online players on price is a race to the bottom. To retain their business, retailers need to offer compelling in-store and online experiences that provide enough value and convenience that customers don’t go elsewhere.

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