Showrooming is gaining popularity amongst consumers and causing grave concern amongst traditional retailers as it hits revenues. Wiki defines it as “examining merchandise in a traditional brick and mortar retail store without purchasing it, but then shopping online to find a lower price for the same item.”
This trend originally began in the US, but is beginning to create waves in the UK. Intersperience found ‘showrooming’ is increasingly popular amongst UK customers with 1 in 3 using mobiles to compare prices, read product reviews or check products were available to buy (particularly relevant over the festive period). Roughly 20% phoned other retailers and compared prices while they were in a retail store with 30% purchasing the product right there and then!
So the big question. How can retailers combat showrooming?
The most obvious solution would be for retail stores to match prices with online retailers. According to research from Forbes, if retailers matched prices this could create the necessary motivation for customers to buy from the retail store over an online competitor.
However, retailers must also look beyond simply matching prices as they have to create a profit in order to sustain business activities and most would not be able to afford to continuously price match due to having larger overheads than online retailers.
Luckily, Forbes found that retailers can also compete with showrooming by using personalised offers, loyalty points, improving customer service and sending items directly to customer’s homes. Paul Hudson, Chief Executive of Intersperience concurs with these findings: “The onus is on retailers to make instore shopping more attractive, via loyalty bonuses, limited edition goods, price matching or better service.”
Retailers must consider what is important to their customers and the advantages that shopping and buying in store can bring – would they be motivated to buy from the retail store because you offer better after sales service or would they respond more positively if you offer additional loyalty points? These considerations are key to retailers winning business.
Combining mobile with customer relationship management (CRM) systems is an effective way for retailers to enhance service and customer relationships. For example, retailers can alert customers by SMS when out of stock products become available to buy and collect in store. With almost everyone having their mobile phones on them, they are then instantly alerted and can collect goods sooner rather than later. This can be a very crucial service for customers who require products urgently.
Mobile marketing is also an effective tool for enhancing customer relationships and generating further revenue. Retail stores can advise their ‘most valuable customers’ about sales promotions instantly by SMS before letting all customers know giving the ‘most valuable customers’ a better chance to purchase products they like as there will be higher availability.
So the big question. How can retailers combat showrooming?
The most obvious solution would be for retail stores to match prices with online retailers. According to research from Forbes, if retailers matched prices this could create the necessary motivation for customers to buy from the retail store over an online competitor.
However, retailers must also look beyond simply matching prices as they have to create a profit in order to sustain business activities and most would not be able to afford to continuously price match due to having larger overheads than online retailers.
Luckily, Forbes found that retailers can also compete with showrooming by using personalised offers, loyalty points, improving customer service and sending items directly to customer’s homes. Paul Hudson, Chief Executive of Intersperience concurs with these findings: “The onus is on retailers to make instore shopping more attractive, via loyalty bonuses, limited edition goods, price matching or better service.”
Retailers must consider what is important to their customers and the advantages that shopping and buying in store can bring – would they be motivated to buy from the retail store because you offer better after sales service or would they respond more positively if you offer additional loyalty points? These considerations are key to retailers winning business.
Combining mobile with customer relationship management (CRM) systems is an effective way for retailers to enhance service and customer relationships. For example, retailers can alert customers by SMS when out of stock products become available to buy and collect in store. With almost everyone having their mobile phones on them, they are then instantly alerted and can collect goods sooner rather than later. This can be a very crucial service for customers who require products urgently.
Mobile marketing is also an effective tool for enhancing customer relationships and generating further revenue. Retail stores can advise their ‘most valuable customers’ about sales promotions instantly by SMS before letting all customers know giving the ‘most valuable customers’ a better chance to purchase products they like as there will be higher availability.
Mobile couponing is also proving to be very popular amongst consumers, particularly when combined with geo-location. This allows retailers to target customers with special coupons directly to their mobile phone whenever they are nearby, helping drive foot traffic to their retail stores.
Retailers must be more proactive in their customer relationship management and focus on what their customers want and make the buying process as painless and enjoyable as possible. Focusing on targeting promotions so they are relevant, enhancing customer services and improving customer communications will be crucial considerations for all retail strategy and help overcome issues of showrooming.
A great example of a retailer adapting to how customers purchase products today can be found in Argos. They changed their retail model to fit in with their customers, focusing on making the buying process as convenient as possible. As a result, customers can now buy online and be alerted when they can collect items in store making the shopping experience more efficient and ensuring their business model remains relevant in the retail environment today.
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