What do you do when you sense that your store is in danger of becoming nothing more than a sample kit for online retailers?
You know the routine. People come into your store, check out the merchandise, ask questions, get the heft of items, seem really interested, poke at their smartphones a bit and then walk out. As a retailer, you’re left with the distinct impression they’re finding what they want and then going online to order it. Some, you suspect, are even ordering from their smartphones from inside your store. What do you do, jam cellphone signals?
It’s called “showrooming” and it’s something retailers of all sizes are struggling to combat. Some are being successful. We’ll look at strategies that work.
Best Buy Most Endangered?
Ask people which retailer is most endangered by online giants such as Amazon and a majority will say Best Buy. The big box technology retailer is certainly a target—as in something you aim at, not the big red stores—but according to a survey, Bed Bath & Beyond (BB&B) is the most “at-risk” retailer.
However, Wall Street is often the ultimate judge of profits and business strategies and it has given BB&B the thumbs up. When analysts looked at what BB&B and others are doing right, this is what they found:
1. Low prices. No surprise here. BB&B offers lower prices overall than Amazon. Much of retail operates on razor-thin margins, and that makes it even more important that everyone is aware of how their online competitors are pricing the same merchandise. Smaller retailers who suspect a customer is showrooming can take a proactive approach and discuss it openly. One Aussie retailer tried to hit showrooming customers with a $5 fee. Not a good idea. Your sales floor people must know how your pricing compares to the competition and they must be trained how and when to engage customers in a pricing conversation.
Walmart, Target and Best Buy will match any competitive price and that has helped them end or reduce showrooming. If you know how online pricing compares to your pricing, you can offer to match a web retailer when it doesn’t go below your cost.
Many shoppers will buy locally if the price is right — especially if they find the local store on their favorite comparison shopping engine. Let the various engines — especially Google — know your prices.
2. Customer service. BB&B and others who are coping well with showrooming have redoubled their efforts at providing world-class customer service. BB&B has decentralized its management, allowing individual stores to better serve the specific needs of their regions. If you have more than one location, don’t adopt a “one size fits all” attitude toward customer service or merchandising.
3. Bundle and recommend products. Be the expert in your field and use that knowledge to put together special bundles and assortments that are not available online. Add value to the transaction that is impossible to replicate in e-commerce. And while it’s becoming more difficult to find items that are not available on the Internet, perhaps there are local producers whose goods you can feature that are not being sold on Amazon. Always be searching for products and services that are not readily available online as well as popular brands that have a minimum advertised price or a resale price maintenance requirement.
4. Online purchase, in-store pickup. Being able to purchase items online and pick them up in the local store has become increasingly popular. Remember, much web commerce is driven by the twin desires to save money and time. Developing your own smartphone app to sell your products could be a good investment.
Why not take it even a step further? Forward thinking online retailers are experimenting with same-day delivery. If the pizza parlor next door can do it, why can’t you?