‘Showrooming’ refers to a customer visiting a store to research products and compare prices right there and then. It’s a phenomenon that has changed the retail environment, with 82% of US and UK shoppers doing it! But retailers can’t always beat or match a price, so how do they get customers to buy from them?
Shop outside the box
In China, many retailers are becoming realtors, by using a store-within-a-store format. They get rent from vendors who in turn get brand exposure – whether a purchase is made in-store or online. Many retailers are asking if they even need stores. To compete with Amazon, companies like Carrefour are turning shops into warehouses. That way, customers can pick up items or get same day delivery. They are changing how they use space, to offer customers ‘instant gratification’.
Retail feng shui
South Korean retailers are re-imagining shop space too. 91% of its population connect on 4G networks via smartphones, so Tesco took the opportunity to offer Seoul subway commuters a ‘virtual grocery wall’. Customers can scan-and-buy products on their way to work and find their groceries on their doorstep when they get home.
Be different
Customers showroom in competitors’ stores too. So, retailers can use price comparison providers to offer special deals: when a product is scanned by a competitor, they can serve up a better price. Retailers can also go further by offering unique products like Tesco’s Hudl and Amazon’s Kindle. Alternatively, loyalty schemes can also make you stand out, and customers pay a premium. Many customers choose British Airways over EasyJet (even though they share departure lounges) thanks to the airmiles rewards.
The human touch
It is important to remember why customers visit a store in the first place - the human touch is something a tablet can’t provide. You can pick something up, try on a garment and talk to a friendly face. John Lewis encourages ‘showrooming’ by offering free Wi-Fi in its stores. They can’t always beat the price, but they can create a personal experience and build brand relationships that’ll bring sales down the line.
Retailers are waking up to the fact that a store is only part of their channel network. It has to work with their e-commerce site, and app too. So, store? Showroom? Or something no-one has thought of yet? SAP can help you decide > http://bit.ly/1iJWAdz
