Tuesday, May 6, 2014

Retail Marketers: Underestimate the Effects of “Showrooming” and Miss a Significant Opportunity

For marketing professionals, an understanding of the multi-channel shopper is crucial to the way in which consumers are targeted along the path to purchase.  As a graduate student in Northwestern University’s Integrated Marketing Communications (IMC) program specializing in both brand strategy and marketing analytics, I am intrigued by the opportunity that showrooming has presented to retailers and how marketers can incorporate consumer data into their shopper marketing strategies.

In the article “Retailers Are Using Data-Based Approaches to Fight Showrooming, A 'call, click or come over' strategy” (Adweek) Janet Stilson analyzes the effects of technology and the rise of the multi-channel shopper in this opportunistic overview of the retailer battle against showrooming.  Stilson discusses how retailers such as The Home Depot and Anthropologie have embraced multichannel shopping by inviting consumers to shop online and pick-up in-store, or by shipping an item to a consumer’s home for no additional cost.  Stilson also discusses how retailers have begun to use big data to learn more about their customers in-store.  By targeting consumer behavior in-store Stilson argues retailers will be in a better position to connect with the same consumers online.  As such, retailers must embrace multi-channel marketing and ensure a consistent brand experience across all channels.

Image Source: Forbes.com

In the article “'Showrooming' Hits Luxury Fashion, Late to Establish an E-Commerce Presence, Fashion Houses Lose Out as Clients Buy Elsewhere Online” (WSJ) Suzanne Kapner, Manuela Mesco, and Christina Passariello illustrate the effects of showrooming on retailers who have yet to acknowledge this shift in consumer behavior, citing the luxury fashion industry as a specific example.  The luxury fashion industry has been resistant to ecommerce where, they would argue, the brand’s in-store experience cannot be effectively replicated.  The authors point out that retailers with a strong ecommerce offering, such as Barney’s, are proving profitable by engaging with the luxury consumer during this transition.  In an industry where consumers previously used the Internet to research luxury goods before purchasing in-store, luxury fashion brands are having difficulty finding the right formula to bring the brand’s in-store experience online.

After reviewing these articles and drawing on my experiences in the Northwestern IMC program, there are three action items you need to consider addressing the practice of showrooming and its impact on your high value customers.

1)   Keep Brand Essence Consistent.  Maintain a brand presence online that is representative of the brand experience in-store. Understand what it is that drives your consumer in-store and replicate this experience online.
2)   Engage Consumers Across Channels. Consumer shopping habits differ online and in-store.  Customize messaging to communicate differently with your online and in-store customers.  Each channel should offer the consumer a unique experience that corresponds to their different needs.
3)   Facilitate Multi-Channel Shopping. Determine the method of delivery most appropriate for your customer.  Consumers may prefer to have the product shipped from the store to their home or to reserve their items online and have them waiting in-store.

Today, your markets are moving online.  You need to align your brand image, brand essence, and company with the changing habits of the consumer.  Brands that maintain presence both in the physical world and online will be better positioned to adapt alongside the changing habits of the consumer.

Catherine Maki is a Master of Science candidate in Integrated Marketing Communications at Medill Northwestern University specializing in Brand Strategy and Marketing Analytics.  Prior to the program she worked in Media Planning in Toronto, Canada.  Catherine has a passion for uncovering insights from quantitative and qualitative data, and translating data into strategic brand stories. Continue the conversation via Twitter at @CatherineMaki or LinkedIn.

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