The reality is that "showrooming," where consumers touch and feel merchandise in stores and buy it elsewhere, is here to stay. This is forcing retailers to find a way to become relevant again with consumers.
Over the decades, retailers have trained customers to come into their stores to see which products are available and on sale. They spend millions of dollars in a single promotion to persuade consumers to come to their stores for the lowest prices. So, is it any surprise that consumers check for low prices with the aid of smartphones and spend their dollars with the cost leader?
Some retailers believe they have a way around showrooming by playing games with consumers. Some are forcing suppliers to create unique products for their stores. Others are sending special coupons to consumers that offer targeted or local bargains. Very large retailers are offering in-store pick-up for online orders placed the same day. In the end, none of these will stop showrooming.
What is the answer? In a nutshell, retailers must re-think how they make money.
There is a simple reason we don’t stop by the local Maxwell House coffee shop to get our morning java. Or we don’t say "Just USPS-it" to ship our packages overnight. Or we don’t use a Sony Walkman to download our favorite songs. The reason is that Starbucks, FedEx and Apple fundamentally changed how consumers feel about the products they sell. No trickery required.
To stop showrooming from damaging their businesses, retailers need to think big and think different. For example, Best Buy's answer is to decrease the size of stores and focus on mobile. Frankly, retail doesn’t need more AT&T or Verizon Wireless outlets.
What would be compelling? Combine a Costco-style membership program with the latest in entertainment (think of a sporting event, concert or movie experience). Split the sales floor into distinct home-technology experiences like IKEA. Show a home office in single, dual or family-based setups. Have manufacturers pitch in (with dollars and staff) to get a showcase on the sales floor. Sell merchandise in a "value-meal" format. Sell products online and fulfill directly from the supplier. Change store sets monthly to keep customers coming back to see what's new. The ideas are endless.
In other words, make the shopping experience so compelling that customers cannot wait to come back and see what's next. And then add the two Cs: charge for it and change it again.
Gary Williams is the founder and CEO of wRatings, and a keynote speaker at the RIS 2012 Retail Executive Summit, on June 13 to 15 in Del Mar, California.
For related content:
The Power of Collaboration
2012 Retail Leaders & Laggards
Stop Showrooming from Hijacking Your Customers
Target Tosses Amazon Kindle in Latest Showrooming Salvo
Target Seeks Alllies in Battle Against 'Showrooming'