Showing posts with label showrooming. Show all posts
Showing posts with label showrooming. Show all posts

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.

Monday, May 6, 2013

The Retail Showrooming Ultimatum – Revolutionize or Die


As a marketer for a physical retail establishment, you are facing an overwhelming challenge in an increasingly digital marketplace. How do you convince consumers to purchase from your store when they can buy the same thing cheaper online, with free shipping, and often without having to pay any sales tax? I am a graduate marketing student in Northwestern's Medill IMC program. I am also a showroomer. As a marketer, I feel bad about that. As a consumer, it feels great to keep more money in my pocket. My paradox of emotions has led me to take a serious look at the phenomenon of showrooming, and to focus my studies on leading retailers' attempts to survive the impending retail apocalypse. 

Showrooming is drastically changing the world of retail, and any retailer not willing to proactively evolve is going to go the way of the flip phone. Wal-Mart initially revolutionized big-box retail stores by bringing incredibly low prices to even the small towns of America through a unique supply chain that served all of its networked stores. Amazon further revolutionized consumer shopping behavior by making e-commerce transactions convenient, fast, cheap, and commonplace. These two shopping behaviors no longer exist in a vacuum; consumers are mixing and matching their behaviors at will. Showrooming has become an integral step in the consumer decision journey and it isn’t just going to go away. It’s time for the next retail revolution - which company will revolutionize the way consumers shop and buy products?

Big-box stores desperate to adapt

Both Target and Best Buy have already resorted to price matching in an effort to stave off Amazon. The Wall Street Journal reports that despite efforts to improve service and selection,  price is still the lowest common denominator. But by engaging in price matching, retailers are focusing the showrooming war on price, which is exactly the war you can’t engage in over the long-term. Engage in price wars and you will effectively commoditize your store’s brand. Any brand knows it’s about differentiation in the marketplace. What do you do better that Amazon? What is the unique value inherent in your brand promise? For brick-and-mortar retailers, it’s not going to be price. If that’s all you’ve got in your showrooming battle tool kit, you’re toast.

Best Buy recently announced that they are bringing Samsung mini-stores to 1400 Best Buy locations to combat showrooming. These “boutiques” within the store will be staffed with specially trained employees to mimic the Apple Store experience. Forbes quoted an industry analyst as stating: “This clearly is the death of showrooming at Best Buy. It never was near the problem it was made out to be.” Pardon me, Mr. Analyst, but how is building a smaller showroom within a larger showroom going to be the death of showrooming? I can still go home and buy most Samsung products on Amazon.

Target, on the other hand, has asked vendors to create products exclusively for its stores. Target understands the value of the “expect more” part of its brand promise.  The company already offers many unique and high-quality goods ranging from clothing lines to furniture that you can’t get anywhere else. More exclusive offerings would play well to the chain’s “posh” appeal, and decrease the ability and desire of consumers to showroom in its stores.


How Do You Start A Revolution?
             Start small but think revolutionary, Retail America. It’s not about quick fixes. And it's certainly not about price. It’s about experimenting and innovating and small wins that will spark the retail revolution and win the long-term war. What can your retail outlet learn from analyzing the big guys? Let's take a look:
  1. Target – Target = Experience. People are passionate about being in the store.  I had a friend that gave up Target for Lent. While prices can be beat online, the satisfaction you get from a "Target Run" cannot. To combat showrooming, you (and Target!) must find ways to enhance the experience of your store; and then MONETIZE it. Your store should be a destination. An oasis. People pay for experiences all the time. Besides selling just products, what experience can you sell your customer? What can you offer them through being in the store that they could never get online? 
  2. Wal-Mart – Cheap immediacy is Wal-Mart's best asset. Not all retail outlets can or should be about providing the best "experience". If your store falls into this category, maybe you should stop forcing customers to come in to shop at a physical location. Customers could have a better "experience" shopping and ordering online, and then pick up at a local warehouse. The customer gets online prices, immediate pick-up, and you save a ton of operational costs by not running a storefront. Amazon doesn’t have physical stores. They just have warehouses. And yet people buy things directly from Amazon all the time.  (But have to wait for their items to be shipped!) You could stop showrooming madness by ceasing, literally, to be a showroom.
  3. Best Buy – Without any private label products to promote, the cheapest prices, or the best service, no one is going to give Best Buy up for Lent. Details in the press are fuzzy about the Samsung mini-stores, and their showroom within a showroom idea just sounds like death-by-showrooming. But they might just be onto something with this "boutique" idea. What if they've actually worked out a pricing strategy with Samsung that allows Best Buy to make its money not by selling Samsung products, but by renting out the store's floor space? Samsung, in turn, effectively eliminates the middle man and directly charges customers prices in-store that match or beat online prices. Everybody's making money, the customer gets to see, feel, and experience the products in the showroom, and then can buy the product in store for the best price available. This, my friends, would be the start of a legitimate retail revolution.  
So what are you going to do better than Amazon? Whether you sell experience, replace showrooms with order pick-up warehouses, create boutiques within your store based on innovative pricing deals with manufacturers, or come up with your own revolutionary idea, get started now. The race for the revolution is on. May the smartest retailers win.

   -Carrie Walker, M.S. Candidate in Integrated Marketing Communications, Medill, Northwestern University. Specializing in branding, with a particular interest in CPG, retail, and shopper marketing. @CarrieWalker04