Showrooming is NOT the reason why retailers are failing.
Showrooming is simply a sales failure. Forget the online aspect, it is a failure to engage and sell.
Allow me to explain …
So the problem is this.
1) Customers are interested in a product.
2) They visit a local retailer to see/touch/try on the product
3) They go home and order this online from another retailer
And the problem is the online retailer?
NO, NO, NO.
The problem is the shop. They had a customer wanting and willing to potentially make a purchase and they let the customer walk out of the store without converting that sale. This is a fail of salesmanship. Price may have been a key determinant in the customer choice, and this needs to be addressed [solution – offer better value, and avoid losing on price], but did the local shop engage the customer? Did they explain the advantages they offer over the online retailer? Did they differentiate themselves and show why they are the best choice to buy from? In almost all cases the answer is no.
Retail shops need to move from being ‘passive’, whereby a customer walks in looks and around and maybe buys to ‘active’ sellers. This means that shops engage with customers BEFORE, DURING AND AFTER the visit. It is an ongoing engagement.
– BEFORE by sharing offers, announcements, advice, new stock.
– DURING by understanding needs and being an A+ service company
– AFTER by thanking customers, offering come back deals and trying their best to stop the online purchase and convert this to a local one.
In most cases, none of these stages happen in the shop. But the online retailer does this through targeted advertising and display, through emails, Twitter engagement and dynamic website content management.
When retailers think active, every customer matters. Every interaction matters. Service IS everything. Price matters, but successful hotels know that trying to win on price is a way to lose customers. The way to win is to be competitive on price and WIN on service. The solution to showrooming involves all aspects of retail – price is there, but also is display, service, and most importantly retail experience.
If you are a retailer – there is one simple way to start understanding this …
Imagine that 80% of your existing customers are never going to walk in your shop again … ever
And of those who do come in 80% will not buy anything.
What would you do?
How would you fix these two issues?
Now do them, because a majority of potential customers are not visiting you and of those that do, most are not spending with you.
I’m not saying this is easy – but the default outcome – what will happen without change -is business failure. The good news is that many small retailers are reinventing themselves and becoming successful small GLOBAL businesses.
Businesses that have the resources and are not changing have no excuses.