5 Ways to Fend Off ‘Showrooming’

Posted on Posted in Consumer Trends, retail strategy, Retail Trends

Note to vendors: “What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands, create a superior guest experience, provide hundreds of thousands of jobs, and support local communities.” So said US discount department store Target, in a strongly worded (and then carefully leaked) letter to its manufacturer brand suppliers earlier this year.

Digital Shoplifting. Showrooming. Whatever you call it, it’s disheartening and damaging when shoppers use your store to check things out, suck your salespeople for knowledge, then whip out their smart phones and buy their selection at a better price on the net. In an age where the customer is in control (and loving it), showrooming is not going to go away. In fact, according to the Wall Street Journal (WSJ), “half of shoppers who buy products online first checked them out in a traditional store”.

So…deal with it.

But how?

Here are five strategies for overcoming one of the greatest threats to retail today:

  1. Sell different stuff. First and most obvious, ensure that you stock well-differentiated merchandise. Push suppliers to offer you more exclusives. Develop your private label offer. Avoid comparison at all costs.
  2. Level the playing field. Sure it’s tough to match Amazon. But you’d better get damn close. My guess is that you can only expect a 10-20% premium over an e-commerce competitor at most. And make sure that your own online prices match your store prices. As much as possible, take price differences out of the equation.
  3. Point your customers online. As reported in the WSJ last week, Walmart is now encouraging its sales associates to refer customers to Walmart.com if they can’t find what they’re looking for in store. More and more retailers have terminals or iPads at the ready dedicated to capturing the sale on their own site if it’s not possible to convert customers at the cash register.
  4. Improve your ‘click and collect’. Not every customer wants to wait for a purchase to be shipped to him from an online retailer. You can play to that urge by dedicating space in store to ‘click and collect’ – pick up purchases made on your website.
  5. Change the pricing model. In its letter to vendors, Target outlined that it was considering ‘subscription pricing’. The idea is to give customers bonuses if they agree to a regular purchase. (Newspapers, magazines, book clubs, cable TV and Foxtel all utilize the subscription model.) Amazon already has in place a ‘Subscribe & Save’ program, where shoppers enjoy automatic replenishment of basics (like paper towels and detergent), discounts, free shipping and an option to cancel anytime.

While it’s not going to work for all retailers, the “lock ‘em in or lose ‘em” approach of Strategy #5 has some merit. And you can utilize the same philosophy by building a great loyalty program that raises the barrier to exit to customers tempted to stray to an online opponent.

Treat the five strategies above as thought-starters. And get your plan in place to keep your customers within your four walls.

3 thoughts on “5 Ways to Fend Off ‘Showrooming’

  1. Its been said before – we live in interesting retail times. I believe that everyone has the need to be ‘cared for’ in all aspects of life. It’s our focus in our retail businesses (outstanding customer service) and its a challenge to try to imitate that online. It remains the one advantage that bricks n mortar have over online, but its only an advantage if it is actually understood and implemented.

  2. Here’s an interesting story,had a customer in her 20s come into our store looking to buy a guitar.Stated she bought lots of stuff online but would not buy a guitar online as she wanted to hear and feel the instrument.
    She had to run off to work so put the instrument on hold and stated she would be back next day for it.
    Sure enough,came back next day looking a bit down saying she wanted to play the guitar one more time again but would not be able to buy the guitar as she had just lost her job in the local mall.
    When asked what happened she stated she had lost her job because the business was down sizing due to too many people buying their products online!!!!!
    She still didn’t seem to get the correlation between her buying habits and her own job loss.
    The consumer just does not get that maybe buying gear from overseas a bit cheaper from,low cost ebayers etc is not going to give them a job,wont pay their annual leave,retirement schemes,not to mention that money spent locally goes around within a community.The ongoing job effect is huge,ranging from effecting local commercial real estate values right through to less jobs with all associated industries, delivery drivers ,advertising business, ,insurance etc and the list goes on.
    Yes, the economies will re adjust eventually but not without huge economic pain first.
    It is unfortunate the consumer is for the most part so price driven and a short term thinker but they will end up with what they want,cheap products BUT with no job and no money to buy anything online anyway !!! , ,

  3. John, love the subscription idea. Just worked through the details with my manager and we have a perfect product.

    Lets say our regular customers buy Hurley one and only Tshirts and we could offer a subscription model and I think it may work.

    Reality kicks in! Lets say we give them $5 off to take up our T Shirt of the month offer. We automatically deduct $35.99 instead of paying full price at $39.99 from their card.

    Cool! They get 12 shirts all at a cheaper price delivered every month, sounds good.

    Post costs $10, club discount is $5 and wages to manage =$5.

    I just discounted a $39.99 T Shirt by $20 and just lost money?

    Great idea, love the thought, hate the reality!

    Best Andy

Leave a Reply

Your email address will not be published. Required fields are marked *