Smartphones and price-comparison apps have given rise to “showrooming,” whereby shoppers browse products in a retail store, check prices via web-enabled mobile device, and then leave empty-handed to buy the items cheaper online. As consumers search for ways to stretch their hard-earned dollars, the practice is becoming a major concern for bricks-and-mortar retailers.
A report by IDC Retail Insights shows that some 48 million shoppers (about 20 percent of the U.S. adult population) will use their smartphones while shopping in stores this holiday season, an increase of 143 percent from last year. What’s more, IDC projects the number of showrooming shoppers will grow to 78 million by 2015.
Vanessa Ting, founder of Retail Path, which helps product vendors develop retail marketing strategies, offered these tips for small businesses that want to prevent showrooming and boost in-store purchases.
- Offer competitive pricing. Big-box retailers like Target and Best Buy are matching web prices this holiday season to compete with online merchants. Lowering prices isn’t always feasible for smaller retailers, but the strategy can pay off if customers add other, higher-priced items to their shopping baskets. “Merchandising tactics that encourage impulse purchases include merchandising in ‘dump bins’ to make items visually accessible and likely to pick up or placing items that you know are typically purchased together adjacent to each other,” Ting says. “A shelf assortment of ‘new items we recommend’ or ‘top 10 selling __’ also encourages browsing, which leads to impulse purchases. The more people browse, the more they buy unplanned.”
- Encourage customer loyalty. Ting suggests building customer loyalty by “creating an irresistible shopping experience, product satisfaction guarantees, better/longer return policies, and customer loyalty programs like reward points or in-store savings from club members.” Get creative about the types of promotions you can offer that online retailers can’t. For example, for a certain minimum purchase (say, $50 or $75) some stores offer in-store gift certificates that are only redeemable after the holidays. This encourages consumers to reach the minimum purchase amount now and return to your store in the new year to redeem the gift certificate. (When they do, they may spend beyond the gift certificate amount, too.)
- Bundle complementary products. Bundling creates an attractive gift that’s ready to go and encourages consumers to purchase multiple items. “Bundled items might include items that are used in a regimen,” Ting says. “So instead of selling facial cleanser, moisturizer, and eye cream separately, you may consider bundling them together in a kit at a discount or offer to sell all three for 10 percent off the regular price.”
- Wrap and ship gifts for a fee. One of the reasons consumers shop online is that they need to ship gifts to another part of the country. If you already ship items, then adding a gift-wrap option for a nominal fee makes buying from you as attractive as shopping online. “What is better than being able to physically select and inspect the product and get the shipping done in one transaction?” Ting asks.
- Offer products that aren’t available online. Selling unique products that consumers can’t find elsewhere is an excellent way to avoid showrooming. “Bricks-and-mortar retailers should always strive to differentiate their offerings from online channels,” Ting says. “Differentiation can be achieved through different color/style options, different piece counts, different packaging presentation, or offer incentives like a loyalty club or free gift-wrapping to prevent losing the purchase to an online competitor.”