Odds are that this shopper wanted to check out a product in person before buying it online, most likely with a competitor. This is called show-rooming – when a consumer visits a store to look at the physical product and then buys that same product for a cheaper price online from another merchant. 41% of those who showroom buy from a competitor.
In fact 50% of male consumers and 42% of female consumers who showroom are members of Amazon Prime. Brick-and-mortar stores have in recent years seen a sharp decline in sales due to the rise of online shopping and show-rooming. In fact 81% of smartphone users use their phones while in the store. Showrooming is part of the broader phenomenon of omni-channel shopping which is when a consumer uses multiple channels to make a purchase. These channels can include the use of a mobile device, online stores, brick-and-mortar locations or a Pinterest board. More specifically a consumer may look at pictures of an item on Pinterest and ‘pin’ it to their board, then they may research reviews online, after this they may visit the store to take a look at the physical product and finally they may go to your or another website on their phone or tablet to make the purchase. According to a recent study over 40% of retail customers cross four or more channels during their shopping journey.
You as a retailer may be wondering how to address this trend.
Here we go through key ways you can address or leverage the rise of omni-channel shopping.
ResearchTo know which remedial steps you need to take to address a potential loss in sales, you first need to identify the gap between your customers’ expectations and your existing capabilities. Your research should focus on the specific needs of your customers, looking at what omni-channel retailing services they expect or need. For example try and find out what capabilities your customers are looking for. This could include being able to redeem promotional coupons via phones without having to print out anything or the ability to check inventory availability while in your store. It could also include wanting a seamless, multi-channel shopping experience whereby they can get detailed product information on your mobile site, ask any remaining questions with an expert in your store and then have the product delivered to them. This entails engaging your customer base through primary and secondary research. Your research should aim to understand their omni-channel needs today and in the future. Based on the results of your research you can then establish clear goals such as setting up a mobile-friendly website, hiring product experts or streamlining (or establishing) an online ordering system. Success metrics can include reduction in amount of lost sales or increase in new customers. You may also have to research prices for products you sell which are also sold on Amazon and then closely match them and at the same time offer add-ons (such as 30% of a next purchase or a complimentary product) that are not available online. Again research on how competitors and online retailers are selling is key.
Integrate TechnologyYou have multiple enterprise systems in-use in your locations. It is important that they are integrated, in that they work together to address omni-channel needs. These include your point-of-sale (POS), order management (OMS) and customer relationship management (CRM) systems. To put it simply your staff should be able to use technology to inform and persuade a customer to make a purchase in store rather than going to a competitor’s website. For example your POS system can be used to aid in the consumers shopping journey considerably. A modern POS which is integrated with a loyalty program can be used to pull up customer traits and preferences to customize customer service to the person being served. A modern POS like Vexilor can also let staff know about inventory levels across locations so that if a customer asks about product availability your staff can quickly check for them. Beyond this your staff should be able to order items instantly for customers from your POS and OMS. Remember a certain set of shoppers are ‘experience seekers’ who are looking for a positive, informative and seamless shopping experience in your brick-and-mortar location. Use your technology to make shopping an easy process for these customers who do want to visit and shop from a modernized, physical location.
Rethink Your StoreThe role of the brick-and-mortar location is rapidly evolving. Now the tools at a retailer’s disposal allow them to go beyond using their location(s) to only house product or services or provide limited customer service. Now you can think of your physical store as a service and engagement center. This is tied with your sales staff’s capability, know-how and the technology tools you give them. Consumers can easily research products online via review sites and their personal connections on social media. The sales person now has to have a wealth of knowledge to match and outdo what the Internet can offer. As such make sure your staff is well informed both about the product and the subject-area the product relates to. As mentioned above collect customer data to provide the personalized customer service online shopping lacks. But the sales staff member is more than an informant – they should be a point of engagement with customers. Again having customer data is key to this. Consider a Givex loyalty program which not only fosters repeat visits but also gets you customer data and information on spending preferences. Beyond this consider arming your sales staff with mobile-point of sale (MPOS) tablets which allow them to quickly pull up customer profiles and inventory levels on the spot. For more on MPOS see our blog post here. See your store as a dynamic place where customers go for cutting edge service and comprehensive advice and information. Encourage staff to seek out interaction with customers with valuable information and promote your stores as places to get product or service related information.
Provide E-Gift CardsE-gift cards lend themselves well to omni-channel strategies. A major goal of omni-channel is to create easy and enjoyable shopping experiences regardless of the channel the consumer uses. Consumers want convenience, that is why so many of them shop on the go from mobile devices – ease of use and limited time commitment needed. E-gift cards fit very well into this model. They are very flexible in that they are always with the consumer and cannot be lost or forgotten increasing ease of use. They can be bought last minute before a holiday or a birthday and be delivered right away. Beyond their inherent benefits, driving customer acquisition and lift, enabling purchases past shipping cut-offs, e-gift cards also influence customer behaviour. This is important when trying to compete with Amazon who price items aggressively and competitively. With e-gift cards retailers can address the cheaper prices Amazon and other online competitors are offering without discounting. This is as they can be used to create custom promotions. For example retailers can offer a $25 e-gift card with every $100 spent. This gives customers an incentive to shop with you versus an online competitor. This also nets the full $100 (unlike discounting) and also drives a second visit that will get additional revenue past the $25 value of the card. In fact many retailers use e-gift cards for their ability to drive extra sales and repeat visits. Remember getting repeat visits during which you can convince a customer to make an in-store purchase with you is a valuable opportunity in the current context of omni-channel shopping. Contact Givex who can easily create an e-gift card program for you.
Create an Omni-Channel TeamParticipating in omni-channel commerce can impact sales, customer satisfaction and even brand perception. With such important areas being touched upon by omni-channel it is worth it to invest in creating a cross-functional omni-channel leadership team. Your competitors may already have established a singular omni-channel lead, but it is worth noting that omni-channel touches on multiple areas of your business. Typically online sales and in-store sales teams are kept separate. However in omni-channel retailing these two areas closely intersect and therefore having these two teams work in unison is key. As such it is a good strategy to have multiple stakeholders at the table when planning an omni-channel retailing strategy.
With these tips at your disposal you now know what to do when that smartphone clutching customer enters your location next time!