Showrooming — It’s Not Just for Online Purchasing
Everyone, at some point in his life, is guilty of going into a store, examining a product and leaving, only to search for a cheaper price online. And who can blame him? We all want the best deal. While this concept of “showrooming” is a huge concern for stores, recent developments indicate it won’t necessarily lead to the demise of the local retailer, as once thought.
What is Showrooming?
Showrooming is the act of using a brick-and-mortar business as a “showroom” for the examination and testing of a product, prior to purchasing the same product elsewhere, online. Showrooming occurs every day, from the person who tries on a pair of shoes at the local running store and then purchases them online from an athletic shoe retailer, to the college student demoing a new laptop at Best Buy, who then buys the same one from Amazon.com.
In general, the reason for purchasing from an online store is a lower price. Sales tax doesn’t always apply. They also have lower overheard costs because they have no physical store or sales staff, and can pass those savings on to the customer.
The Shifting Landscape of Showrooming
Many fear that showrooming will be the demise of local businesses. Recent developments suggest otherwise. For example, the mighty Amazon.com is rumored to be planning its first physical store, suggesting that it perceives an advantage to going local.
Amazon is already in the process of getting closer to the customer by building new warehouses and testing self-service pickup lockers located within 7-Elevens, a move that is taking it just one step shy of having a storefront.
Plenty of big-box retailers, such as Walmart and Meijer, are fighting back by offering free next-day or even same-day shipping to their local stores from their online stores, directly attacking one of Amazon’s weaknesses.
Interestingly enough, in recent moves that rocked the retail world, both Target and Walmart declared they would stop selling Amazon Kindles because of people showrooming these Amazon products.
Advantages of a Showroom
An expensive showroom offers several distinct advantages for consumers that cannot be obtained from an online site. The instant gratification of being able to purchase a product and take it home right then and there is always a plus. There is the ability to touch, taste or smell the product, as well as the opportunity to try it on and check for fit, finish and size. Finally, there’s the ease of return in case of damage or a change of heart.
As the advantage of not charging sales tax appears to be waning, taking away one of the major cost advantages online retailers have enjoyed for years, local stores may just be getting a second lease on life.
Though less widely written about, showrooming among local stores is occurring more frequently than ever before, driven largely by the ubiquitous smartphone. Today, you can head to a single local store, test or try on your product of interest, and then walk out the door. From the comfort of your car, you can then visit a number of other local retailers’ Web sites or apps to see who has the best deal, and proceed there to make your purchase.
Technology Shifts Showrooming From Threat to Asset
Brick-and-mortar store owners realize that their staff and showrooms offer huge advantages over their online counterparts. Probably no greater example of this exists than Ikea, whose huge showrooms have placed products in room after room of connected experiences for years.
On a local level, savvy brick-and-mortar retailers are addressing showrooming head-on by encouraging smartphone use and turning the “threat” into an opportunity for further engagement. In general, price is rarely the sole determining factor for a purchase. Consumers want to make the best, well-informed purchasing decisions they can. Retailers, therefore, should help them by providing as much useful decision-making information as possible.
Since the dawn of the Internet age, consumers have come to rely on the ability to get answers to their most important questions with the click of a mouse — and now the touch of a screen — without having to speak with a salesperson.
Well-designed mobile Web sites that contain product comparisons, user guides and user reviews can keep the showroomer within a local business’ sphere of influence. Combine this with easily accessed coupons, deals and loyalty cards, and you not only eliminate any perceived benefit of going elsewhere, but you create reasons to purchase right at that moment.
Mix of Mobile and Brick-and-Mortar: Good or Bad?
Showrooming and mobile enablement are not going away, and the most successful businesses going forward will recognize this new reality and embrace it. I’m optimistic about the impact of mobile technology on brick-and-mortar stores. Mobile technology has the ability to help local merchants engage customers to a degree that was never possible before. The fact that Amazon is moving toward brick-and-mortar storefronts should be a sign that the physical store is far from dead.
The tools may change, but the end goal remains the same: To make a sale. The businesses that embrace mobile technology and leverage it, as opposed to trying to avoid or hide from it, will be the biggest winners in the end.
Scott Metcalfe is chief strategist of Fetch Local Customers, a Chicago-based online advertising firm that specializes in melding local search, social and mobile marketing, and local advertising technologies and strategies.