How Are Retail and Showrooming Evolving?

by Mark Doornbosch

What happens when shoppers buy online—after in-store retail showrooming?

Yes, showrooming is here to stay

Within a short period, the term showrooming has become ingrained in the retail vocabulary. Some pundits even suggested back in 2012 that showrooming was the beginning of the end for brick-and-mortar locations. But, as with most trends in retail, showrooming has evolved beyond those fears that the sky is falling or that buyers will now always be checking for best possible margin killing price.

And now there’s omnichannel

In a recent study, the CFI Group coined a new phrase in retail, omnichannel, claiming that retail is progressing from a point-of-sale to a point-of-commerce position. As retailers become more familiar with this new concept, omnichannel has come to the forefront.

The omnichannel challenges retailers to seamlessly incorporate consumer-facing efforts of:

  • Physical location
  • Online experience
  • Social media connection

Retail showrooming purchase statistics

Let’s look at some of the stats that came out of the CFI study and another, The Mobile Consumer Report, on show rooming.

The studies focused on digital consumers who own and use a smart phone or tablet. While 75% of the survey respondents said they engaged in some sort of showrooming activity, 47% still completed the transaction while at the location.

Clearly, something beyond price is influencing the decision to purchase. So, we look at top showrooming activities while in the store.

What the showroomers are doing:

  • 65% conducted product research
  • 47% search for product reviews
  • 66% verify the price

It’s evident that price does play a major factor but so does overall value.  But with 47% of consumers who are engaged in showrooming demonstrating a willingness to purchase while in store, it appears the consumer may not be as price sensitive as initially believed.

How to influence buyer behavior

The retailer can win the consumer over with the right customer experience encompassing the overall value proposition.

Another interesting stat is that 46% of those consumers that did not purchase in store completed the transaction online, with close to 13% completing the transaction on the retailer’s website. If the stats hold true, then 59% of those showrooming consumers are willing to buy from the originating retailer if given the opportunity.

If the retailer has the in-store and online experiences aligned, it seems reasonable that they are in a better position to serve the customer’s needs and thus win their business.

Steps to help ease the sale

Retailers that have recognized this trend have taken the next step by arming the sales floor associates with access to devices and systems  that help the consumer feel comfortable with purchasing either at the store or through the retailer online.  Either way, they are capturing the sale.

So what would be the advantage of the retailer incorporating in-store experience with the online experience?

  • Increased volume, revenue, and profit margin
  • Decrease inventory levels while increasing overall inventory turns
  • Increasing customer loyalty, providing the buying experience on the customer’s terms
  • Ease and convenience for the consumer
  • Limiting sales losing out-of-stock issues
  • Customer access to the complete line of inventory the cross the category

The difference that sales team training makes

It’s obvious that there is opportunity embracing the omnichannel trend. But there are also hidden dangers in the execution.

It’s not enough to arm a retail team with product knowledge. Without properly training the stores and sales associate to take advantage of this new world of retailing, the study showed there are consequences:

  • 18% of the customers purchased at another store
  • 15% purchased on a different web site
  • 7% did nothing

Based on these studies it’s apparent that showrooming is not the end of brick-and-mortar locations but rather the continuing evolution of retail.  And, today’s digital consumer expects more than ever. 

  • They want the price that really means value
  • They want convenience
  • They want it to be easy
  • They want all this on their terms; to shop for what they want, when they want and where they want.

But it still comes down to last 3 feet of retail to determine whether an omnichannel strategy will be effective. Will the associate in the aisle be properly trained to handle the digital consumer? Will the retailer or brand be properly represented?

 

Topic: General

ABOUT THE AUTHOR

As a Retail Practice Leader at MarketSource, Mark works with national brands focused on retail distribution to execute their field-marketing plans. The MarketSource message is simple; we help you sell more, faster. As the self-proclaimed Retail Sales Sensei and Master of Marketing Zen, Mark can be reached via LinkedIn or through the MarketSource sales concierge.

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