Sears recently reported that it would start close-out liquidation sales at more than two dozen locations. Streets crisscrossing downtowns in big and small cities alike are increasingly filled with depressing, empty storefronts.
The primary doom factor for giant nationwide chains, local mom-and-pops and every type of retailer in-between has been the explosion of online retailing. Unfortunately, the future of brick & mortar isn't getting sunnier due to the continuing expansion of e-commerce. Not that evidentiary statistics are necessary, but Big Commerce reports that 67 percent of millennials and 56 percent of Gen Xers prefer to shop online rather than in-store.
For brick & mortar consumer electronics retailers, the showrooming phenomena just adds insult to injury.
"As a phenomenon, showrooming is a legitimate consumer behavior which has created actual disruption in the industry, specifically for CE retailers – as a whole, CE retailers typically lead the industry in showrooming behavior by their customers," reports BRP Consulting SVP and practice lead Ryan Grogman, who specializes in retail strategy and technology solutions surrounding the customer experience. "Roughly 50 percent of consumers exhibit showrooming behavior, more strongly tied to big ticket purchases such as consumer electronics."
See also: Insight: Facing the Future
Every retailer has been impacted by showrooming. "Abt has battled showrooming for the last 20 years," Jon Abt, co-president of Chicago-based Abt Electronics notes. "It's a way of life in the retail world because the internet has made it much easier for a consumer to comparison shop."
Successful retailers, however, after initially piling up merchandising sand bags, have come to adopt a more judo-like approach to e-commerce, using the internet's force against itself to combat showrooming.
Turning Showrooming Against Itself
The physical, real-world relationship between customer and technology product – as well as the physical, real-world relationship between retailer and customer – forms the basis for succeeding in a showrooming-dominated retail environment.
"In order for most humans to understand a product or service, they need to see it, touch it, use it, experience it," explains Robert Heiblim, president of Blue Salve Consulting. "Anything new, such as VR/AR/XR, is not a common experience, so people will want and need to try it before they can decide to buy it." Apple, for instance, immediately grasped this see-it/touch-it/use-it/experience-it necessity, and its retail outlets are constantly swarmed by customers playing with product as a result. A plethora of retailers have since followed suit.
This real-world hands-on experience available only in-store is merely the foundation of an omnichannel sales approach almost de rigueur in the 21st century. According to "The New Rules for Omnichannel Retailing" report from Shopgate, "being an 'omnipresent' retailer is no longer a 'trend' in 2019 and beyond. It is now table stakes to remain competitive…"
But even the real world requires tweaking, starting with personalizing the store experience. BRP's 2019 POS/Customer Engagement Survey found that 79 percent of consumers say personalized service from a sales associate is an important factor in determining where they shop.
"The most basic merchandising strategy is to give good, friendly, caring and accurate customer service," Heiblim says. "People like to buy from people they like, and are happy to reward those who give them service."
Brick & mortar sales staff not only has to be friendlier but more knowledgeable thanks to showrooming's mirror image, webrooming – suddenly well-informed consumers who research product online, then come into a store to see, touch, use, experience, and, hopefully, buy. "It's become imperative for CE retailers to not only train their associates on how to be better salespersons," Grogman asserts, "but to also arm them with as much product knowledge as possible."
But where on the web do webrooming consumers go to get smart – a competitor's site or yours? "Of course you must have a web presence," Heiblim insists. "And your web presence must be maintained and kept fresh with new content that relates to your shoppers. This is not a museum, it is part of your retail offer. And since consumers can see an endless panoply of marketing out there, be honest with yourself about what you are doing."
"The internet has made it easier for a retailer like us to stay competitive," Abt agrees. "Before the internet, my brother and our store managers used to drive around to local competition to gain insight on pricing in the market. Now we have tools that update our web and store prices on the hour to make sure we are as competitive as possible."
In-store see/touch/use/experience combined with online presence have led to an increasing range of effective omnichannel sales strategies that include:
• BOPIS (Buy Online, Pick-up In Store)
• BORIS (Buy Online, Return In Store)
• buy in-store, ship to home
• buy anywhere, return anywhere)
"Differentiating retailers are now embarking on the journey towards 'unified commerce,' which is the promise and delivery of omnichannel strategies built upon a common technology platform," notes Grogman. "This platform would help to truly make shopping across channels more seamless by providing real-time inventory, real-time pricing and 'shared cart' functionality, all while utilizing a single version of the truth for customer information and history. Our recent study found that 86 percent of retailers have or plan to implement unified commerce platform by mid-2021."
Of course, larger retailers such as Best Buy and Abt can more easily deploy resources, both financial and institutional, to institute omnichannel strategies. But there are strategies even single-store operators can adopt to survive in a showrooming world.
"This means using platforms such as Amazon or eBay, for example, and engaging for consumer reviews and online presence," Heiblim recommends. "Services such as Shopify are quite inexpensive and integrate with others to get you one shopping basket in-store and online. Most of the food delivery guys will also drop packages. You will need to hire or rent online marketing skills and make them part of your business. Distributor partners can give you a virtual endless aisle online so you can compete on breadth of offer. You will need to be on people's phones with a mobile friendly site. There are plenty of inexpensive and effective software platforms to get into the fray."
"The only way that fixes showrooming is if the customer doesn't bother to come into our store," observes Abt, which offers BOPIS for all its products. "Even with showrooming, our close rate is extremely high when a customer comes in."