What is Showrooming?
Showrooming is the practice of examining a product at a brick & mortar retail store, and then buying it online.
The number one reason consumers engage in this practice is price. Many online retailers list the same product at lower prices to lure customers to buy online. Since most brick & mortar stores have higher overheads and list the same products at higher prices, this gives customers a reason to buy the products online.
In many cases customers still want to touch and feel the product, or try it out if it’s a fashion or furniture product for example, and so they head to the nearest brick & mortar retailer who lists the same item to examine the product before completing the online order.
Showrooming Vs. Webrooming
Webrooming is the the opposite of showrooming.
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In webrooming, customers browse the online stores to see the different collections of merchandise and compare prices between different retailers, and then go to the brick & mortar store to complete the purchase.
In this case, consumers had the intention to buy offline, but they used the online stores to compare alternative and gather more information about the available products. Usually they do this at the online stores of the same brick & mortar retailers they plan to shop at.
How Does This Affect Retailers?
With the rise of showrooming, a phenomenon associated with what was labeled as the “Amazon Effect“, a lot of retailers started losing market share to online shops and marketplaces.
Not only did this affect their sales and margins, but it also affected their store operations and conversion rates, as their own properties (their stores) started being used by shoppers who didn’t intend to buy from them in the first place.
A lot of retailers fought back and started to find solutions to combat showrooming at their stores.
One popular example is how Best Buy launched a price matching campaign and turned the whole situation around, by striking a deal with Samsung to use its stores and create in-store boutiques called “Samsung Experience Shops” to showcase their products and sell them at MSRP.
How to Combat Showrooming?
Retailers have many ways to combat showrooming, and close more sales at their stores. Perhaps one of the methods was the one we mentioned above, and that is: Price matching.
However; competing on price is not the only way and also not the best option for brick & mortar retailers.
Some examples of how retailers can combat showrooming include:
Establishing Loyalty Programs
When retailers have attractive loyalty programs, that reward customers who shop at their stores, this will act as a detractor from buying somewhere else, as shoppers will be keen to complete more purchases at the store to unlock loyalty benefits and points.
This does not mean the retailer has to give those benefits and rewards out of their own pockets. The retailers can use their influence and large customer base to strike deals with relevant, non-competing businesses, to give their customers special offers, in return for referring them foot traffic of qualified customers.
The stronger the partnerships a retailer can establish, the more attractive and effective the loyalty program will be.
A Well-Trained Sales Team
Since customers already come to the shop to browse the item they want to buy online, having a sales team who is trained very well to close sales and is equipped with the right product knowledge, can help convert more of those customers on the spot.
- The New Role of The Store
- Analyzing Sales Performance
- Managing Sales Performance
Providing Personalized Services
One of the benefits brick & mortar retailers can provide, that would give them a competitive advantage over online retailers is personalized services, such as personal shoppers, stylists and solution consultants.
This service acts as an added value, that will improve loyalty and at the same time close more customers on the floor.
Store-Exclusive Products
Retailers who can afford to manufacture their own private label products can have certain products sold exclusively at the stores, and can’t be found anywhere else online.
Some retailers who carry multi-branded products have also started refusing to carry products from vendors who list on marketplaces that engage in price wars. And since a big part of shopping happens offline and not online, this has made a lot of product manufacturers refrain from listing their products at marketplaces, so that they won’t lose their lucrative buyers.
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