In January a sign in the window of a Melbourne health food store went viral. It told customers: “As of February, this store will be charging people a $5 fee per person for ‘just looking’. “Four people did pay for ‘just looking’ so this frustrated attempt to combat showrooming (where customers check out products in-store only to buy them elsewhere for a lower price) did make US$20, but the tactic is hardly likely to woo potential customers – and, as showrooming’s key demographic is smartphone-savvy shoppers aged 18 to 39, this trend is here to stay.
The impact of showrooming on bricks and mortar retailers can’t be overestimated – around 48 million US shoppers showroomed during the 2012 holiday season, an increase of 134% over 2011. Successful retailers will use smartphones to transform their customer service, reach out to new shoppers and generate new revenues.
Bricks and mortar retailers should start with the proposition that any customer who is showrooming in their store is a sale they shouldn’t lose. If retailers can make their mobile experience more compelling than rival offerings, why should the consumer go elsewhere? Making that experience compelling starts with easy, efficient Wi-Fi in-store but it will also embrace such initiatives as launching an app that shows up where shoppers look for reviews (Twitter, Facebook, CNet, forums), displaying reviews on point-of-sale signage for big-ticket items and using geo-fencing to target in-store offers which can point shoppers to products that are only a few feet away.
Sometimes, there’s nothing as compelling as a bargain. Some studies suggest that 20% of in-store purchases are impulse buys and so discounts offered on their phones can be very effective: in 2012, 35 million mobile coupons were redeemed by US shoppers.
Retailers can learn from the ease of shopping online. Convenience and delivery options have been instrumental in making Amazon a retail giant. The development of click and collect services has seen large traditional retailers regain market share; in one major company’s case more than half of online sales are picked up in-store.
One great convenience of shopping online is that you can do this 24/7. Some retailers have turned stores or billboards into round-the clock operations where – through the use of QR-codes or digital touchscreens – customers can order items for pick-up or delivery. Chinese e-commerce giant Yihaodian has opened 1,000 such virtual stores across China. Bricks and mortar retailers may need to be more audacious if they are to compete in the long term.
Last but not least, a great customer experience can trump the desire for the best price. Think of your physical store as “experience HQ” Karl Heiselman, CEO of brand consultants Wolff Olins, has suggested. Let your customers engage, network and play.
Some retailers have flourished by allowing consumers to browse their collection on instore iPads. For others, the secret to success is creating an in-store ambience that makes customers want to hang out there. As business guru Joseph Pine said once, “Time is the currency of all experiences. The more time your customers spend with you, the more money they will spend now and in the future.”