03 April, 2014

Showrooming: the death of the retail store

Melbourne Herald Sun, 3 April, 2014

They call it the death of the retail store, the treachery that will destroy our way of shopping - along with thousands of jobs, stores and shopping centres.

The term is 'showrooming' and we've all done it at times. You walk through Myer or Harvey Norman looking for a TV to suit your need. You find one that really seems to be the goods. Make a careful note of the model number and sticker price. Then, maybe sitting in the store's own cafeteria, you search out the model on your smart phone, looking for a better price.
Order on line and you might get it a hundred dollars cheaper. Just click your credit card number for delivery.

As you can imagine, the store managers are not happy to have their expensive retail location used as a free display centre for their competitors. For the past couple of years they have been at a loss, unable to catch this slippery sales loss.

But they are learning and getting smart. A mixture of technology, training and psychology is being brought to bear and you can believe that around the world there are thousands of specialists and consultants developing anti-showrooming techniques.

A lot depends on smart sales staff. At this year's National Retail Federation show in New York, speakers and trainers focussed on the issue. They showed how a well trained sales person can spot a potential buyer and win them over with their own technique.

Armed with a tablet, they can build on the big advantage a store has - the physical TV sets, side by side for comparison, say. Then using their tablets they can show the small difference in the internet price (probably knock a few bucks off for "being such a good customer") and make the winning stroke: to put the set in their hot little hands and in the back of their car right away.

This is not simple to achieve. You have to show good merchandise, have it readily available for purchase, have your sales assistant as bright as a button in knowing their moves. But it can be done.

IBM recently released a study which shows that while in 2012 some 50% of internet sales followed customer showrooming, in 2013 this had fallen to 30%. Hopefully this meant that a percentage of sales were intercepted before they flew into the ether.

It also means that more customers are going straight online without visiting the store first. So more needs to be done to bring them into the bricks and mortar premises.

IBM questioned 30,000 consumers around the world to find out what they really want out of technology. Price, availability and ease of delivery came out, not surprisingly, as major. But what is important is the closer marriage of the online and in-store experiences.

If asked, they are willing to give data like their GPS position - so that they can receive special offers when they are in certain parts of the store. One group, called the Trailblazers, are making full use of technology, for their showrooming, model research, user comments, delivery progress - and while they are just 12% of the respondents, they indicate the direction the market is taking.

It's called "omnichannel retailing", the combination of online, mobile, and in-store. And storekeepers that want a thriving business need to tune in, quick.