OK, who hasn’t gone to Target, Walmart or Best Buy, scoped out some merchandise and then gone home and bought it through an online site like Amazon? Understandably, we’re all looking for the best deal, which online retailers can often deliver.
This isn’t new but is a practice that’s been increasing steadily ever since we jumped on the online retail bandwagon. Smitten by the promise of lower prices, unparalleled convenience, possibly no sales tax and free shipping, we’ve turned to online shopping in droves. In fact, ‘Cyber Week (formerly Cyber Monday, the Monday after Thanksgiving, exceeded $6 billion in spending last year and is projected to increase by double digits again this year. Both the number of online shoppers and the size of the sale continue to grow unchecked.
And yet…much of the time we still want to look at and touch and try out our merchandise before we buy. And where do we go? Brick-and-mortar retailers, of course. And although shoppers have been doing this for years—looking in person, but buying online—it’s now got a name: Showrooming.
As online sales have exploded, some have predicted the demise of the brick-and-mortar retailer. Enter the ubiquity of the smartphone and tablet, and more and more of their customers were showrooming. It seemed, for awhile at least, that merchants felt powerless to stop them. After all, how in the world could they compete?
Showrooming presents no small problem: The couponing site CouponCabin reported recently that 4 in 10 smartphone or tablet owners say they use their device in stores to compare prices. And of these, 97% say they’ve subseqently bought the product online for less. Meanwhile, the National Retail Federation (NRF) just predicted that half of all holiday shoppers will buy gifts online. And it’s reasonable to assume that many will be scoping out merchandise beforehand with smartphones or tablets in hand.
Despite the worrisome trends, there’s been a consistent, tell-tale sign that physical outlets weren’t about to become obsolete anytime soon: the customer’s need to look and feel. Which also translates as instant gratification. Ah-hah! Brick-and-mortars rediscovered that they had an advantage that online retailing couldn’t replicate. With that pivotal revelation has come a renewed determination to figure out how to stop showroomers in their tracks and convince them to buy in person, not from an online retailer.
For those who may doubt that touch-and-feel is enough on which to build a renewed—and winning—
marketing and sales strategy, consider this: Industry sources have reported that the king of online retailers Amazon is actually planning to open brick-and-mortar outlets. What’s more the online giant is apparently also experimenting with some additional, alternative distribution strategies, like self-service pickup lockers at places like 7-11 stores. Obviously, Amazon sees the benefit in having a physical, local presence.
At the same time, online retailers like Amazon are moving toward brick and mortar, big retailers who are already there–determined to convert showroomers into customers—are coming up with more strategies than ever to directly counter the showrooming effect. Price-matching is one of the first lines of defense. Retail giants like Walmart and Target, who previously wouldn’t match online prices, now are (conditionally) matching prices not just from Amazon, but also other online retailers like BestBuy.com and ToysRUs.com. Layaway is making a huge comeback this year, in a nod toward consumers’ need to still exercise some caution with credit.
And retailers are taking some direct hits at Amazon. Not only are some offering free next-day or same-day shipping from their online stores to local stores, but Target and Walmart recently took a step that rocked the retail world. Both announced that they would stop selling Amazon Kindles because of people showrooming these Amazon products!
Now brick-and-mortar retailers are moving beyond just defensive strategies to incorporate offensive ones: How to turn showrooming into a distinct advantage.
But all this begs the question: Where does the smaller, independent retailer fit into this picture? We’ll explore that in tomorrow’s post…
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