Wednesday Nov 14, 2012

Showrooming: What's the big deal?

There's been lots of chatter recently on how retailers will combat showrooming this holiday season.  Best Buy and Target, for example, plan to price-match certain online sites.  But from my perspective, the whole showrooming concept is overblown.  Yes, mobile phones make is easier to comparison-shop, but consumers have been doing that all along.  Retailers have to work hard to merchandise their stores with the right products at the right price with the right promotions.  Its Retail 101.

Yeah ok, many websites don't have to charge tax so they have an advantage, but they also have to cover shipping costs. Brick-and-mortar stores have the opportunity to provide expertise, fit, and instant gratification all of which are pretty big advantages.

I see lots of studies that claim a large percentage of shoppers are showrooming.  Now I don't do much shopping, but when I do I rarely see anyone scanning UPC codes in the aisles.  If you dig into those studies, the question is usually something like, "have you used your mobile phone to price compare while shopping in the last year."  Well yeah, I did it once -- out of the 20 shopping trips.  And by the way, the in-store price was close enough to just buy the item.  Based on casual observation and informal surveys of friends, showrooming is not the modus-operandi for today's busy shoppers.

I never see people showrooming in grocery stores, and most people don't bother for fashion.  For big purchases like appliances and furniture, I bet most people do their research online before entering the store.  The cases where I've done it was to see if a promotion was in fact a good deal.  Or even to make sure the in-store price is the same as the online price for the same brand.

So, if you think you're a victim of showrooming, I suggest you look at the bigger picture.  Are you providing an engaging store experience?  Are you allowing customers to shop the way they want to shop, using various touchpoints?  Are you monitoring the competition to ensure prices are competitive?  Are your promotions attracting the right customers?

Hubert Jolly, CEO of Best Buy, recently commented that showrooming might just get more people into his stores. "Once customers are in our stores, they're ours to lose."

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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