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5 ways your business can survive showrooming

Technology is making comparison-shopping easier than ever before, allowing customers to enter a store, look at a product (or try it on for size), and then buy it online for a lower price, circumventing the store entirely. This trend is called "showrooming." While some may see it as a threat to brick-and-mortar businesses, it doesn't have to be.

Willing to walk for discounts
Forty-five percent of customers shopping in a brick-and-mortar store will walk out and complete their purchase online for a discount of as low as 2.5 percent, according to an August 2012 study from GroupM Next, the research arm of media investment management company GroupM.

"Our showrooming research revealed some harsh realities for retailers," says Jesse Wolfersberger, director of consumer insights for GroupM Next. "There is a segment of the population that will walk out of the store for incredibly small discounts." brick-and-mortar-store

A December 2012 poll by Harris Interactive found similar results. According to its numbers, 43 percent of adults have showroomed, and Best Buy and Wal-Mart were the two stores at which shoppers were most likely to "preview" a product before buying it for less online.

Surviving showrooming
The news isn't all bad for retailers, however. GroupM Next also found that 10 percent of shoppers won't leave the store without buying something, even for huge discounts.

"Brick-and-mortar stores will always have a number of advantages over online retailers," Wolfersberger says. "Small businesses can still compete in the showrooming age because they provide non-monetary advantages that customers like: familiarity, , helpful associates, touching and feeling a product, and the ability to take it home immediately."

Here are seven ways for small- and mid-sized merchants can thrive in the age of showrooming:

1. Stay competitive with your pricing when possible.  "Staying within 10 percent of the 'prevailing' price online gives you a fighting chance at retaining customers," says Patrick Monteleone, Ph.D., director of research for GroupM Next.

Monteleone suggests having a strategy to monitor the competition's prices and adjust yours accordingly. Also, consider having a price-matching policy -- in which you accept online competitors' prices in your store.

2. Engage in "clienteling." Clienteling involves interacting with shoppers, providing personalized service and making them aware of special offers, according to Gary Schwartz, president and CEO of Impact Mobile and author of "Fast Shopper, Slow Store: A Guide to Courting and Capturing the Mobile Consumer."

In a February 2012 Mobile Commerce Daily column, Schwartz suggests that retailers use tablets to help shoppers find a product, add a product to a wish list and tie this wish list to a profile. In addition, ask customers for their mobile numbers or email addresses and ask them if they're interested in updates, VIP events and sales -- things that will guide them back to the store.

In addition to providing good customer service, engaging the customer "prevents them from using their mobile device and allows your sales associates to provide information and discussion around the customer's purchase decision," Monteleone says.

3. Empower your customers. Provide free Wi-Fi to customers so they can look up reviews and product information in-store. Consider providing a couple of onsite laptops where customers can research product information.

4. Reward your customers. Loyalty programs, such as points or rewards programs, keep customers coming back, Monteleone says.

5. Offer shoppers something online retailers can't. University of Buffalo researchers found that, when consumers shop at specialty stores, they are not concerned about higher prices and are more likely to purchase multiple items when there.

"If you can't compete on price with the online retailers, sell something they don't, [such as] in-store exclusives, accessories or products that suit the unique needs of your core target customers," Monteleone says.

Extra services and deals go a long way, too.

"Bundling products, free accessories, gift wrapping and related products all are things that online retailers can't craft for your customers," Monteleone says. "They don't know your customers."

See related: Technology lets customers skip checkout lines

 

Published: March 26,2020

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