Google published research in May 2013 on how mobile is transforming the shopping experience in stores. It found that “84 percent of shoppers use their phones while in a physical store.”
Flipping Your Perspective
Showrooming impacted the shopping experience on Black Friday. A November 2013 report titled Holiday Shopper Profile: Offline Insights into Thanksgiving and Black Friday Shoppers by Placed, provider of location-driven insights and mobile ad intelligence, revealed that “43 percent of shoppers plan to compare prices online while they are in a physical retail store.” While some retailers may see showrooming as a threat -- perhaps it could also be an opportunity?
By examining the myriad ways that consumers can showroom, it’s possible to determine what poses a threat and what serves as a potential opportunity for retailers.
Seize the Moment
Let’s look at the different opportunities and threats:
- Coupons and discounts -- Many consumers tend to use their smartphones in store to look up coupons and discounts prior to purchasing an item. The Placed survey also reported that 49 percent of respondents planned to get coupons and discounts through their phone while in store. This provides an opportunity for retailers. By providing extra incentives through online coupons while customers are in store, retailers can increase the likelihood of a purchase.
- Comparing prices -- A majority of consumers use their smartphones in store to compare prices before purchasing. If they get a better deal somewhere else, they’ll purchase the item online and abandon the store purchase. This is where things get tricky. If the store hasn’t put a strategy in place to be price competitive, it presents a threat and is at the core of the showrooming debate. As a way to combat the threat, many retailers now offer a price match even with other online retailers. Instead of leaving the store to go elsewhere, customers can be sure they are getting the best price and secure a purchase at the store.
- Product information -- Many consumers will look up product information on their smartphone before purchasing to make sure it’s the right fit. Retailers should provide all relevant product information to consumers before making a purchase as this can reduce the likelihood of costly product returns.
- Accessing the store website/app, in-store -- This is where the real opportunity lies for retailers to create a true omnichannel experience. Many leading retailers are now starting to use in store apps. These help customers find what they’re looking for in store or if the product is out of stock, it can be ordered and delivered to their home. The Fast Company article “The World’s Top 10 Most Innovative Companies in Retail” highlights that “according to Walmart, its app-wielding customers make twice the shopping trips per month and spend 40 percent more than non-app users.” There’s still quite a long ways to go, both in terms of educating the consumer and in store employees, but the potential to leverage multiple channels while in store is promising. A January 2014 IBM Institute for Business Value Global Consumer Study claims that more than 30 percent of consumers surveyed are willing to share details about themselves including their social handle, location and mobile number if they receive a personalized experience.
- Smartphone purchases -- Many businesses leverage smart devices to eliminate the long checkout lines for consumers. If the customer can choose from waiting in a long line or simply using their smartphone to purchase the same item from a different online retailer with hard to beat convenience and speed, their choice may be obvious. Herein lies both a big opportunity and potential threat. The same IBM report claims that showrooming drove 50 percent of all online sales in 2013. Perhaps the opportunity for multichannel retailers is to drive more online sales from inside the store.
- In store shopping list app -- Some consumers will use their smart phone to reference their shopping list. For example, Walmart allows consumers to create a shopping list within its app that can later be referenced in-store to help find the items more quickly.
It’s up to retailers to take advantage of these new opportunities. Price matching is not the only factor in play here. Organizations that create a truly personalized and engaging experience can win over customers and drive tremendous in store sales. As Steve Chazin put it in his e-Book about The Secrets of Apple’s Retail Success, “Customers who make a connection buy more, have fewer returns and enjoy greater lifetime value.”
The potential for creating these personal experiences in store, or even with a one-on-one phone conversation is still greater than through most digital channels as long as we seek to leverage all the information customers are willing to share with us, including past purchases, past voice and textual interactions, social postings, etc. Welcome to the big data world!