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Showrooming. A discussion.
What is it?
I recently read an article about the practice of ‘showrooming’, where shoppers visit stores to check out merchandise and then buy it online cheaper, leaving the bricks and mortar store’s role as little more than a product showcase, and very often not as an online destination as well.
The subject is gathering speed in the media with Dixons, an electronics retail chain in the UK, actively encouraging consumers to visit bricks and mortar stores before purchasing online with them in their 2011 campaign. The NY Times also reported on a study conducted by the Codex Group (Oct 2011), that states 24% of people who said they had bought books from an online retailer in the last month had also seen the book in a bricks and mortar bookstore first. That rose to 39% for those who purchased from Amazon in the same period. The Wall Street Journal has also weighed in on the matter, stating that in 2011 US store sales overall edged up 4.1% during the holiday shopping season, while online sales jumped 15%. And while online sales represent only 8% of total sales, that is up from just 2% in 2000.
The media does love to dramatise, but an article on imediaconnection.com framed it perfectly: It is descriptive of nearly any retailer's plight with respect to mobile - if shoppers mainly use mobile to price-check, and you don't have the lowest prices, what's their mobile strategy?
What to do?
This got me to thinking, good question, what would I advise my client? Here are my thoughts:
Differentiation. Unique selling point, point of difference, etc. Whatever you want to call it, sell things that other people don’t have and consumers will come to you. US juggernaut Target has publicly championed this path sending a letter asking suppliers to create special products that would set it apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform on their computers and Smartphones. This can be seen at many retailers, making successful collaborations with prominent designers that are exclusive to them.
‘The human layer’. I first heard this phrase at the AIMIA digital strategy 2012 conference. You can read the review here. It makes a lot of sense; collect data but then do something with it to benefit the customer. Make x purchases in store or online with us (and make it integrated, don’t differentiate between the two, it’s one and the same to the customer) and get y in return. Seen this book in store but can’t be bothered to carry it home? Buy it at our online store and get it delivered for free. Or go one step further and throw in a coffee at the café downstairs. Shop with us, buy in store or online and we’ll track your purchases to notify you of relevant new releases that you’ll love. Think about what your customers want. There needs to be a reason for someone to keep coming back to you other than just price, otherwise why wouldn’t you shop all over the place?
Engagification. Also talked about at AIMIA, but gamification/engagification has been around for some time now. Again, this needs to be approached both on and offline – it’s the same brand so therefore should be the same experience and process to the customer. Fantasyshopper.com (only available in Europe) allows users to spend fantasy money on virtual representations of fashion items from on and offline retailers and share items, outfits or even whole wardrobes with friends. Run in conjunction with over 40 retailers, the retailers then use that information on users’ tastes to offer deals, discounts and specials.
Founder Chris Prescott said, “The big play is ‘web to store’ – especially with the emergence of Near Field Communication in mobile phones, which is coming along. The big problem right now with offline stores is the cost of dealing with returns.” Because users can create outfits online and share them with friends (of course, the game is designed to encourage that), they are more likely to settle on an outfit they want to keep, making returns rates lower. Focusing on the physical store is key, although it’s an online offering.
Looking at how to bring great experiences in-store in the offline world is definitely key; you only have to look to Apple and their complete lack of competitiveness on price points to understand what a great brand experience both with the product and in the stores can do for a brand. If an online store pulls in user comments and ratings why can’t these be displayed in the physical store too? For that matter, why can’t there be a place in the physical store for customers to leave comments about what a great in-store experience they have just had that then goes onto the online store?
Embrace online marketing. No really. It’s not just taking your offline ad and putting it online, nor is it creating a Facebook page or Twitter account (although that’s all good). What’s your web presence optimisation strategy? If you are in Social Media are you engaging with the community, and how are you directing traffic to your online store? Are customers looking in-store but buying elsewhere online as they don’t know about the online store? Pinterest’s traffic increased more than 400% between September 2011 and December 2011, bringing in 7.51 million unique visitors in December alone, data from Compete indicates. This correlates with the amount of traffic Pinterest sent elsewhere, becoming a top five referrer for several apparel retailers, according to Monetate, who created the infographics below. Read our blog on Pinterest here.
Shopkick, a mobile shopping app in the US, drove more than $110 million worth of in-store revenue for its partner retailers in 2011 - and that’s only its first full year in operation. It’s patent-pending presence technology, a small box located within the store, emits a signal that the app detects and decodes, knowing the shopper is actually in the store and then provides reward points, called “kicks”, to the shopper. Shopkick reportedly has 3 million active users, with 10 million products being scanned through the app. Source: socialcommercetoday.com.
Think about it. How are you reaching your customers online? Are you in the right places to drive them to buy in your store, both the offline and online one?
The Talking Type