Sep 26, 201207:42 AMThe Web Chef's Cafe
with Paul Gibler
From showrooming to showstopping – 15 tips to engage customers
The world of retail is in a state of flux as retail channels, communications tools, and techniques rapidly shift – largely driven by changing consumer behavior coupled with new mobile technologies.
On the decline are traditional enclosed shopping malls, now showing their age, along with traditional department and grocery stores.
On the ascendancy are digital retailing, mobile and tablet commerce, off-price and used goods retailers, local foods/goods, specialty grocers, membership stores, and retailers offering experiences instead of just merchandise.
One area of significant growth is mobile commerce. Forrester forecasts sales quadrupling by 2017, with retail mobile commerce sales reaching $25 billion by that date. Driving mobile commerce growth is the rapid increase in the number of smart phones. Pew estimates that 45% of U.S. adults now have them.
These mobile-savvy consumers are increasing their in-store online search behavior to find product information, reviews, and competitive prices as they shop in physical stores. This new consumer behavior now has a name – showrooming. Ithas created a degree of angst among retailers of all sizes as they see a huge potential threat to their investments in physical stores and trained sales forces.
While showrooming can be seen as a threat, Time Business recently reported that a study from mobile marketing firm Vibes found that 48% of customers who use a mobile device to search for information, including prices, felt better about their in-store purchases at brick-and-mortar stores. These research results presage a potential positive impact from showrooming behavior.
But to combat the potential negative effects of showrooming, retailers have a number of strategies and tactics at their disposal. Among these are:
- Optimize and unify all your sales channels by fully aligning your offline and online operations (catalogs, website, mobile site, physical store). This alignment should include cross-channel deals, pricing, inventory systems, and customer service.
- Invest in your retail salespeople so that they are well trained and able to engage customers on products, services, and benefits associated with purchases through your store. Empower them to offer competitive deals to customers who demonstrate showrooming behavior.
- Stock unique products that consumers will find difficult to find elsewhere. This includes unique sizes, colors, combination packages, locally produced merchandise, or private-label merchandise.
- Stock products that are expensive to ship or require personalized installation, alterations, or other added “high-touch” services. For example, retailers like Best Buy are increasing their stocks of large-scale white goods like refrigerators, stoves, and dishwashers, recognizing that these product categories haven’t faced the showrooming competition seen in other merchandise categories like home electronics due to their installation demands and the high shipping charges associated with their weight.
- Avoid stock-outs due to overly aggressive inventory management programs in order to help satisfy consumers’ desire for instant gratification and to combat the longer lead time for online purchases (a threat that will be increasing as mega-retailer Amazon builds more and more distributed warehouses to accelerate delivery times around the country).
- Develop service offerings that can only be delivered locally and not through an online purchase outside of your market area.
- Create customer experiences with product samples, product demonstrations, trunk shows, exclusive offers, and in-store events.
- Capitalize on local cause marketing to connect with customers looking for local retailers that give back to the community.
- Co-market and partner with complementary merchants or service providers to build engagement, traffic, and loyalty.
- Enhance your visual merchandising through frequently updated and eye-catching window displays and in-store merchandising.
- Consider quick sales with limited inventory and sales prices to drive traffic to your store.
- Maximize your “touch retail” opportunities by encouraging merchandise touching to build merchant-merchandise-customer engagement. Your customers can’t get this online. For example, the Apple Store has been very successful by getting the merchandise front and center to allow customers and sales and service reps to interact in a high-touch manner. Lego Stores also pursue this strategy, allowing kids and adults alike to interact with Legos as they build their latest masterpiece in the store.
- Build up your social commerce capabilities with Pinterest, Facebook, and Twitter to increase engagement and allow your brand advocates to share your story with their network of friends and family. Just keep in mind that social media can cut two ways. Negative experiences can resonate even faster than positive ones, as McDonald’s experienced with its ill-fated use of the #McDStories Twitter hashtag last spring and the complaints and criticisms that it generated.
- Specialize your merchandise categories into a destination niche with a highly loyal customer market. For example, local retailer Fromagination has been very successful in creating an award-winning specialty food store focused on a wide range of local cheeses and meats, with samples and tastings as part of their retail offering.
- Implement CRM – customer relationship management systems that allow you to profile, track, and communicate with customers based on their product and communications preferences. As part of this initiative, build loyalty marketing programs to reward customers for repeat purchases.
By pursuing some of these strategies and tactics, your retail store will be able to go from showrooming to showstopping while engaging customers in a longer-term, more profitable relationship.
For more on the latest tips, techniques, and resources on e-business and marketing, follow me @theWebChef and/or follow my boards on Pinterest. For insights on the Madison and Wisconsin business community, please follow/like us @IBMadison, LinkedIn, Facebook, YouTube, and Pinterest.
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