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Stop, Or I’ll Grab Your Phone!

by Allen Weiner  |  August 22, 2012  |  Comments Off on Stop, Or I’ll Grab Your Phone!

My aunt died at the ripe of age of 95. About 40 years ago, she was the scourge of local retailers where I grew up. She was ahead of her time in many ways, never went shopping without the latest copy of Consumer Reports tucked under her arm, using her ratings bible to do copious amounts of homework before she bought anything. From a toaster to a new car, unless Consumer Reports gave it high marks she would pass on the purchase no matter how good the deal. “No, we don’t have that one in stock, but this newer one is better and cheaper, “some poor work-on-commission sales clerk would urge. My aunt always turned a deaf ear.

Today’s retail stores (Sorry, the term brick and mortar, makes me think of an endless string of ugly row homes) are infested with a plague of shoppers who have carried on the tradition of my late aunt. Some clever pundit came up with the term “showrooming” to describe the practice of bringing a mobile device into a retail store and comparing the in-store price to what the web has to offer. To understate, showrooming is driving retailers crazy and it’s a trend not likely to end soon.

According to research from GroupM Next, 45 percent of customers shopping in-store will leave and complete their purchase online for a discount as low as 2.5%. This number jumps to 60% of shoppers who will leave and purchase a product online for a savings of 5%. When discovering an online discount of 20%, a small percentage of shoppers (13%) stay and complete their purchase in store.

Some retailers are fighting back. A few are creating proprietary UPC codes for products to combat apps that use bar code scanners to initiate a price search. Costco and Wal-Mart work with manufacturers to create semi-private-label versions of such goods as HDTVs that have UPC codes and product numbers unique to that store. Others are being proactive in offering price match guarantees and in-store/drive-through pickup for purchases made from the web. Interesting approaches all, but each of these solutions fails to take advantage of what should set retail stores apart.

I like to read but often have trouble deciding on my next book. I am looking for something perhaps out of the mainstream and if such guidance were available, I might even wander over to the local bookstore, a practice that seems abhorrent to many time-starved shoppers. In Portland, Oregon, Powell’s Bookstore, one of the nation’s largest and best indie book retailers, the shelves are littered with 3X5 cards with fun, terse recommendations from the store’s well informed staff. Am I likely to pull out my mobile, look for the book on Amazon and buy it? Actually, no. For one thing there is the instant gratification of walking out of the store with book in hand. But keep in mind, Powell’s knows that Amazon does not generally deeply discount books beyond best sellers so there’s really no savings to be hiding in the stacks.

Short of collecting mobile devices at the door or jamming the airwaves, showrooming is part of the new norm for retailers. A few simple pieces of advice: know your products and know your customers. Regarding products, separate your higher margin goods from those that are geared to bring people in the store. On those come-ons or loss-leaders, it’s wise to match prices to any online purveyor but stand firm on those products that are not broadly distributed or exclusive to your outlet. Those are simple laws of retailing. In terms of customers, understand their hot buy buttons (beyond price) that will drive purchases. Educate your staff and make them experts, use new forms of jazzy, informational digital signage and video or even print out product reviews and use them as part of the merchandising. Will it make a difference? It certainly can only help.

But then again, armed guards at the door frisking customers for the new breed of wearable mobile phones may not turn out to be a bad idea after all.

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Tags: amazon  digital-commerce  digital-marketing  showrooming  

Allen Weiner
Research VP
7 years at Gartner
23 years IT industry

Allen Weiner shares insights on how to monetize digital marketing through commerce. His focus on “Commerce Everywhere” provides perspective on how social, mobile, search and emerging channels can be tapped to improve customer experiences and drive business results … Read Full Bio




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