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Commentary

Win At Showrooming By Engaging

There has been a lot of press recently surrounding retailers' struggles with "showrooming." Showrooming is when shoppers have their eye on a product, have potentially done some research around it and come into the store to see it, but not to buy it. Ultimately, they make the purchase online -- where the best prices are just one finger swipe away.

While showrooming is a relatively new term, it’s a well-developed phenomenon that has plagued the automotive and electronics industries for years. Consumers "shop" around, looking at specs for cars, cameras, TVs and white goods -- using easily available information to compare reviews and prices -- in order to view, hold, or ‘test drive’ the item before they buy online from a competitor.

FMCG (Fast Moving Consumer Goods) businesses are trying to nip this new-to-them phenomenon in the bud, going so far as to incent vendors to help their plight -- for example, by offering discounted rates on products at the brick-and-mortar level.

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Shopping is increasingly accessible. The removal of physical and geographic boundaries means people can choose from a wider range of goods and make price comparisons easily (and in-store on their smartphones). There is no longer a straight and narrow purchase path. This has led to new shopping behavior and the rise of what we call the "purposeful shopper." People are investing more of their time shopping, using all available resources and technology formats to search and research -- comparing, validating and simplifying their choices.

For retailers to succeed, they need to embrace these developments and develop a new understanding of how to engage shoppers. Shopper research has proven the importance of price, experience, time -- and of course, value. Some FMCG categories will not have as much of a struggle with showrooming for the simple reason that the purchase is cheap and quick. Think drugstore shampoo, a "low risk" purchase of an often familiar product where savings would not be more than a few cents -- it’s almost not worth the "data." In other cases, where the potential for savings is a little higher and purposeful, shoppers could get down to business, but retailers can make up for a price difference by creating more value.

Value is not just about money, but is something highly emotional and often unconscious. For a shopper, the experience of buying hair care products in a salon is a positive one --although it’s more expensive. The salon environment provides benefits, such as an aura of expertise and confidence that the product will work, and these seem to outweigh the couple of dollars saved if the same product was bought on a beauty discount Web site. And there is nothing like instant gratification (particularly when it carries the promise of looking great).

The good news for retailers is that there’s still a lot of room for them to shift the paradigm. The way to do this may not be to reduce their prices to bargain levels as we are starting to see happen. Instead, they need to focus on keeping consumers in the store and find new ways to compensate with engaging experiences, potentially leveraging the technology that is currently contributing to the struggle.

We know from online retailers that there is a huge value in consumer reviews, so if these were made accessible in-store, value would be added to the purchase. The opportunity to do this certainly exists with retailer-specific QR codes and barcode scanners. (Target, for example, has an app that allows shoppers to scan a UPC code to pull up reviews.) This not only keeps consumers in the store longer, it keeps them engaged in the experience. They are connecting with one another and with the retailer on a more emotional level, which gives them the reassurance they need to buy now.

Retailers can win at showrooming. They just need to engage in the game.

 

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