Don’t chase the consumer as she now swirls and prances across PC, TV, retail aisle, smartphone and social channels. Learn to dance with her instead.
That is, in essence, the advice of CFI Group in its latest somewhat breathless brief “Holiday Shopping 2014: Shutting Down the Showroom Effect.” Sponsored by omni-channel service provider eBay Enterprise (which may account for the drama), the holiday advice to retailers is grounded in a new CFI study of 1,000 shoppers that shows 51% of consumers plan to spend a whopping 40% of their budgets online this holiday. Part of the challenge for brick and mortar retailers, the study claims, is that 57% of those surveyed are using their smartphones in the store to bridge the retail and digital worlds – not always in the store’s favor.
CFI finds that 38% say they plan to “actively showroom” this holiday. I am not entirely clear how consumers actually “plan” such activities, but I guess the figure suggests how some consumers have already made online comparisons and lookups by smartphone a part of their shopping ritual. CFI warns, however, that a much larger group of consumers, 69% of smartphone owners, are more passively engaged in showrooming by using their phones for comparative shopping here and there, even though they don’t identify the practice as “showrooming” per se. The survey found that 50% of respondents do price comparisons with online competitors in store and 63% check local competitors for better prices.
The threat is most acute in the electronics segment, where 70% of showroomers say they have used phones in store to shop elsewhere. The practice is less striking in apparel (47%) and toys (43%). But interestingly, it appears that the likelihood of people showrooming an item is not affected much once they get beyond the $25 price point.
And price is the key driver for the cross-channel tango for 42% of consumers doing the dance. These consumers say they expect to realize between 11% and 25% savings from using an online alternative to physical retail, which puts a good deal of price pressure on bricks and mortar. CFI notes that the next closest motive, convenience, has edged up since last year, cited by 26% of consumers. This suggests that free shipping and delivery to the home are becoming increasingly effective lures for online alternatives.
Showrooming has been the flashpoint phrase for retailers for several years now, even though the term oversimplifies the complex ways in which consumers really shop. While it is clear that online behemoths like Amazon and eBay succeed in poaching customers in store aisles with better pricing and convenience, it is also true that online research drives retail in significant ways. Some surveys show that so-called “Webrooming” (researching online to buy in-store) is more popular than showrooming. And more to the point, it has also been shown, many in-store smartphone users are performing look-ups not to buy elsewhere so much as to feel confident in the purchase they are about to make in-store. According to other studies I have seen over the years, the fear-of-being-ripped-off is also a strong driver of cross-platform consumer behaviors.
All of which still begs the question of how retailers take greater control of the situation that is clearly and quite literally now in consumers’ hands. Well, they can’t. Fantasies for “owning” or controlling the consumer experience are just that – delusional. What they can try to do is dance with the consumer – engage with the shopper with some of the same tools the shopper is using. Or at least this is CFI’s argument. Their analysts point out that more than three-quarters of consumers say they have never been helped by sales associates who are “tech-enabled.” I presume this refers to salespeople armed with their own smartphones and tablets. Actually anyone walking into Best Buy now will see assistants now pestering you relentlessly with tablets in hand. I am not sure whether having the technology is somehow enabling them in a substantial way or if it is there to create a spiritual bond with the tech-enabled consumer. At any rate CFI found that even among the 24% of shoppers who had been approached by a tech-wielding assistant, 55% said it was of no help at all.
These analysts recommend that retailers mobilize outside of the store as well. For instance, they find a third of consumers do respond to social outreach from brands when it includes a discount. And the content driver for smartphones is recommendations and reviews for products. Essentially, the shopper is using the device as a consultant as much as anything. And in some cases consumers are using the device to replace the assistant who is never there. Mobile chat with customer service gets very high satisfaction ratings from those who have tried it, and half of shoppers claim they would make greater use of mobile chat with retailers if it were available.
All well and good. To be sure, retailers need to dance the cross-channel tango with consumers more effectively. But I am not sure that the sole focus on being the good digital buddy is proper either. After all, I would say Best Buy’s app and mobile experience is quite strong. It provides product information, user reviews, and even product comparisons in the app itself. As I mentioned, the assistants are now dogging you with tablets in hand. I am not sure this is stemming the tide for them, however, or even substantially improving the in-store experience. I spent half an hour this weekend waiting for my "tech-enabled" sales associate to find the right model iPad Air 2 in the back room.
I wonder if bricks and mortar is always well served by chasing the "omni-channel" vibe by appearing to be all teched up and hip in the store. Perhaps the human channel is better served by being just that – more human – than the other channels. How about sales associates who actually know the product, know what other people think of it, or have some hands on knowledge of them? How about amplifying the reason the consumer comes to retail - to touch and feel product? Try making demos more prevalent and functional? Make it easier for the shopper to try things and explore how well the product works.
After all, consumers choose different channels with an expectation of different experiences. It seems to me there is a risk in chasing the “omnichannel” grail of making all the channels seem indistinguishable instead of seeming seamless. Dancing the cross-platform tango with users does not necessarily mean that you dress up in the same high-tech garb they do. Maybe it means recognizing that they are in the store because the screen at home and in their hand is not closing the loop for them.