If you ask a small business owner to compile a list of the challenges they face, you’re most likely to hear about employee turnover, day-to-day operations, marketing costs, and evolving in ever-changing landscapes, just to name a few. But as we continue to barrel towards an increasingly digital age of shopping and customer experience, retailers find themselves presented with another challenge.
“The practice of examining merchandise or products in a store and then buying it online for a lower price. 'Showrooming' benefits online retailers, since they can offer cheaper prices than brick-and-mortar retailers for identical products because of their lower overhead. They also do not collect sales tax in most cases.”
In 2014, 1.32 billion people bought something online. By 2021, that number of digital buyers is expected to reach 2.21 billion.
These numbers are staggering. We live in an Age of Amazon, where products are one click away from showing up to your house via drone. The Internet has advantages many brick and mortars don’t strictly on the sheer volume of product they’re selling.
How to Prevent Customer Showrooming in Your Retail Store
Growing up in a small, family-owned retail setting, I began to see showrooming become much more prevalent in the last few years. It’s not as big of a problem as it was, because we’re constantly refining the strategies designed to beat it. First, you’ve got to think like the customer.
Why They Do It
Why is the customer showrooming? It stems from a myriad of reasons, most of which are subconscious. As a society, we’ve become so ingrained with the one-click, free shipping, instantly-at-my-door mentality. Brands are in a constant dogfight to provide the lowest price, the best deal or the easiest purchase. It’s not a shock these things have permeated into the buying habits of everyday consumers.
Brick and mortar retail operations know the term all too well. A customer walks into your store to try on a pair of shoes with no intention of buying, because they found them on an Internet warehouse for 30% cheaper. They don’t want to deal with the hassle of returning said shoes if they don’t fit, so they use your store, take up your time and walk out the door. It’s an unbelievably frustrating feeling. What can you do? Berating or kicking the customer out will only create a much larger issue.
But before you get angry when you see a customer perusing their smartphone, let’s look at some data. An OuterBox study on mobile ecommerce found that 80% of customers are using their smartphones while in-store. That’s substantial! When you break it down, there are three main reasons for it.
They’re researching for more detailed product descriptions.
What kind of energy savings can I get from this washing machine? What’s the expected battery life of this smartphone? Customers are hungry for information, wanting to know exactly what they’re buying and if the value outweighs the cost.
They’re comparing prices.
This is the most prevalent use of smartphones in retail stores. While in-store, a whopping two thirds of customers get on their phones to check prices. If your prices are higher than the ones their looking at, you’re fighting an uphill battle.
They’re reading reviews on your store.
In our store, we sell snowboards, which is traditionally a younger demographic. A BrightLocal Local Consumer Review Study found that “91% (!) of 18-34 year old consumers would trust online reviews as much as personal recommendations.” Creating a strong reputation online stems from the in-store experience.
How to Fight Showrooming
Customer Service and Experience
It never ceases to amaze me when employees at a business can’t be bothered when you walk in the door. A simple hello doesn’t cut it anymore -- “86% of customers are willing to pay more for a great customer experience, while 73% point to customer experience as an important factor in purchasing decisions,” according to a Superoffice study.
Putting the emphasis on the customer -- you know, the one who’s spending the money -- will yield much higher return in the long run. People want to feel welcome when they walk in, not shunned or ignored. Plus, they’re more likely to leave a positive review or post something on social -- helping you build that online reputation we find to be so important.
A highly-trained, personable staff that creates engagement breaks down the initial barrier. At our store, we don’t approach a customer negatively if we see them price shopping. We start the conversation off with a comment on the weather or asking where they’re from, parlaying that into if they need any help. Most times, that simple engagement, which leads to a conversation, is all it takes to get them to buy in-store.
Creating events to draw customers in the door creates the benefit of a personal relationship. It’s 2019, but people still shake hands. There’s a sense of trust established when you meet a business owner or salesperson. An event marketing handbook by The Bizzabo Blog states that “84% of leadership (Vice President and C-Suite) believe in-person events are a critical component of their company’s success.”
Piggybacking off of events, experiential retail is a way small businesses are fighting showrooming. By providing an experience -- instead of just basic commerce -- customers are drawn to you because they want to feel a part of something. There are a lot of websites where you can buy snowboards, and we know that. We use a demo program (try before you buy) to get our customers through the door, then incentivize purchases by applying the rental cost to the retail price.
More brick and mortar stores are adopting a multichannel approach to selling their products, meaning they offer them via both offline and online marketing channels. A continued engagement with the customer, whether that be through personal interaction, email, social or a website live chat increases the opportunity of them ultimately purchasing from you. How important is having a multichannel approach? Digital interactions influence 36 cents of every dollar spent in retail stores.
As an area shop (meaning we are a shop that’s close to the ski resort) a lot of our customers don’t live near us, with most of them coming from Buffalo, Cleveland, Pittsburgh or Toronto. Since they’re coming to us, we recently set up a pickup in-store option on our website, allowing customers to shop for the product they want, pay for it, then easily pick it up on their way to the resort.
Building out your online presence can be difficult, especially when you try to do it strictly online. Encouraging shoppers to share their experience by tagging your social accounts or leaving a review grows your digital presence while maintaining that face-to-face interaction.
We recently bought an Instagram follower count ticker, so whenever someone follows our account the ticker updates in real time. People stand there for minutes at a time, following us just to see the ticker move. It provides a fun experience in-store while giving us the benefit of added reach afterwards.
Embracing the habits above will help you combat the effects of showrooming and start to change the buying habits of your customers. With strong, strategic cross-channel marketing execution, a specialized curation of product, and engaging customer service/experience, you can turn the tire kicker into a tire buyer.
Spencer Timkey is a freelance writer specializing in retail, marketing and small business. When he’s not running day-to-day operations at his family’s snowboard shop, he’s writing on topics that help other small businesses succeed. Follow him on Twitter @its_me_spence.