As the holidays approach, retailers are busy prepping on a variety of fronts: executing on advertising campaigns, ordering enough stock to accommodate the masses, and planning contingencies to counteract the dreaded phenomenon known as showrooming.
Showrooming is when shoppers stop in your store to see a product in person, then walk out and purchase it elsewhere, whether at another brick-and-mortar store or, more likely, an online retailer.
That consumer practice has increased with the expansion of mobile, leaving retailers competing in their own stores for the attention of digitally savvy consumers who know that Amazon (and free two-day shipping) is always just a few clicks away.
Showrooming Creates Opportunities
Though showrooming sounds like a retailer's nightmare, it is actually an opportunity waiting to be exploited if you understand why showrooming happens and how to respond to consumer needs.
So, why does it happen? What makes consumers leave a store without the product in hand, even when it's exactly what they want?
One big reason (and the most obvious) is price. Who doesn't want the best deal they can get on whatever they're buying? But here's the thing: Though consumers may wish to purchase online, they are more interested in browsing in-store than online, according to a recent Holiday Shopping Survey by PunchTab.
That is not to say customers won't browse online. In fact, the No. 1 reason consumers will use their smartphones this season will be to browse. Consumers will look for coupons and deals, and then they'll walk through your doors to test-drive products, and likely look at their smartphones again while in-store—just to be sure they're getting the best deal out there.
But technology isn't the enemy. In fact, it's your best defense in the war against showrooming.
What's Working (and Not Working) in Your Favor
Before I delve into specific ways to counteract showrooming, let's look at some consumer behaviors expected this season:
When will consumers shop?
- 50% of shoppers will start in November and December.
- The top in-store shopping day is Christmas Eve, with Black Friday close behind.
- The top online shopping day is Cyber Monday, with Black Friday close behind.
If you think online stores are the enemy, the Christmas Eve shoppers are there to prove you wrong. With time against them, they turn to online shopping. Offering a one-stop shop that includes great customer service and deals will benefit you.
How much will they spend?
- 80% of consumers are set to spend the same or more than last year.
- 15% of Millennials are planning to spend more than last year.
Millennials are just coming into their spending years, so include them in your marketing plans. They're research-happy and trust their peers more than marketers, so make reviews and social testimonials part of your displays to appeal to that proclivity.
Where will they shop?
- Amazon, Target, and Walmart are tops online
- Target, Walmart, Macy's, and Kohl's are the favorite brick-and-mortar stores for holiday shopping
- Over 50% of holiday shoppers are either undecided or likely to spend 50% or less at the same stores where they made a purchase last year
That last bullet in particular means brands can absolutely get a foot in the door with consumers who were less than satisfied with last year's shopping experiences.
Getting Your Message Across
Though all generations will use their cell phones to research and browse, Millennials will use them the most to assist with shopping.
Social media will be the first touch for many (but not all) shoppers—Millennials will use Facebook and Pinterest for inspiration, but three-quarters of older generations won't use social media at all.
With showrooming, one of the most crucial parts of the equation is in-store marketing because this is where you lose customers, even while the product captures them. Browsing in person is their top deciding factor. But that doesn't mean your store will get the sale.
In-store marketing must make it clear what consumers get for shopping with you.
What Will Get You the Sale?
All roads lead back to loyalty programs. Yes, there are other techniques you can employ to beat showrooming, but the best is a strong, omni-channel approach tied to an exceptional loyalty program.
- 50% of all shoppers consider coupons and deals important or very important in influencing purchase decisions.
- Nearly 25% consider earning and using loyalty points important or very important, with another 25% considering it "somewhat important."
- Loyalty programs allow you to collect and analyze data that you can use to target your promotions even more effectively in the future to keep customers in-store and purchasing.
Additionally, loyalty programs provide an edge in other areas where you may not be able to compete, like price-matching. Mega-brands like Best Buy can match competitors' prices pretty easily, but smaller retailers—that may need to be more creative to keep their bottom lines in line—can compete by offering killer loyalty program incentives.
For example, you could partner with Foursquare and offer virtual cash to spend at your store when consumers check in. Anything that adds to the value of the items they're considering can tip the sale in your favor.
Here are a few more things to keep in mind as you're crafting your brand's anti-showrooming strategy:
- "I want it now" syndrome—Free overnight shipping offered by online retailers is great, but it's not better than walking out of the store with what you want right now.
- In-store Wi-Fi is an advantage—Make Wi-Fi easy to access and loop it through your brand's website with a landing page that points to special deals, a loyalty program sign-up, etc.
- Consumers are researching—Put the research within easy reach; have consumer reviews posted alongside product displays, and if you're willing to price-match, say so.
The best defense is a good offense, so plan ahead, embrace showrooming, and give consumers a reason to stay and buy at your store once they've fallen in love with a product.