Why are people showrooming and how should retailers respond?

Many retailers are understandably worried about shoppers using their mobiles to compare prices and the threat posed by online-only retailers, which can often beat offline prices. 

However, there is much to be learned about the motivation of mobile shoppers. It seems some intend to buy online no matter what but there is potential for shops to turn others around with great in-store experiences, discounts and rewards. 

Columbia Business School and Aimia have just produced a report on showrooming, which contains some useful stats.

Here's a selection from the report, along with a few of our suggestions for retailers to deal with the 'threat' of showrooming.  

What is showrooming? 

I think there have been different interpretations of the meaning of the term. Some (including me) have taken it to mean the act of using mobiles to compare prices and check product details while shopping offline.

However, in this report and elsewhere, showrooming means to actively choose to buy online after carrying out such actions on mobile. These stats should be viewed in the light of this definition. 

Some key stats from the report

• 3,000 consumers, classed as 'm-shoppers' who use mobiles in stores to assist their purchase decisions, were surveyed. These respondents were drawn from the UK, US and Canada.
• 74% of these m-shoppers are more than 29 years old. It's not judt a young man's game. 

A recent Econsultancy survey found that 40% of respondents had used their mobile while out shopping for reviews and price checking, which is actually a slight decline on the same survey in 2012.

Even so, the number of people showrooming is still twice as high as it was in 2011 (19%). 

Have you used your mobile to compare prices and look at product reviews while out shopping?

Why people are showrooming

The results are interesting, though not so surprising. In times when economic conditions in all three countries are difficult, it's no surprise that people will use all the tools they have to find the best deal. 

So, lower prices online (69%) and free shipping online (47%) are obvious reasons for showrooming, while 27% seemingly have no intention of buying in store. 

Reasons for showrooming

Why people decide not to showroom

This chart is perhaps more interesting, as it highlights the advantages that bricks and mortar retailers have over their online only competitors, primarily the desire to possess that product right away. 

The top two answers are more or less the same thing and show the power of that 'want it now' mentality. Convenience is another, though that's also an oft-cited reason to shop online. 

Other things here offer potential for retailers, such as great customer service in-store (17%), a personal connection with staff (7%), and rewards (14%). 

Reasons not to showroom

What should retailers do?

There are a number of possible responses, one of which is that retailers should do as much as they can do provide an excellent in-store experience. Friendly staff providing one-to-one assistance, a great atmosphere, and the ability to get touchy-feely with products cannot easily be replicated online. 

Clearly there's also a portion that retailers can do little about, unless they want to get into a price war with Amazon, which isn't a wise move, except perhaps for short-term promotions. 

Here are some ways for retailers to respond: 

Create digital shopping experiences

Where possible, retailers should embrace technology to connect with mobile shoppers, and create a 'wow factor' in stores. 

For example, Nike's interactive store uses motion-sensitive mirrors which display footage of local runners wearing products from the store as customers walk past them. 

It also uses interactive touchscreens to allow customers to access further information about products and order online. 

Of course, not all retailers can afford fancy tech like this, but they can use affordable technology to make in-store ordering easier, to provide more information about products, and things like staff equipped with iPods to help shoppers. 

Launch apps and mobile sites

The chart below shows that other retailers' websites are the main 'tools' for showrooming (75%) but this is closely followed by the retailer's own website. 

This represents a massive opportunity for retailers with mobile-optimised sites and apps. They can make it easier for 'm-shoppers' to interact with their site rather than a competitor's.

Also, of those using another retailer's site, how many do so because the store they're in has a site which is hard to use on mobile? 

Mobile tools used for in-store research:

I think a key part of a retailer's strategy against showrooming should be to get 'm-shoppers' using their sites and apps as much as possible, to keep them from the clutches of Amazon. 

First of all, they need to have a mobile site (and/or app), but then they need to promote it with in-store prompts, barcode scanning, QR, and make it easy to access with in-store wi-fi.

Provide free wi-fi

Let mobile users access the internet with ease in stores, but make sure you have your own site for them to access. 

This can help to attract customers to your store, and they will appreciate not having to use their mobile data allowances or pay for data.

Recent stats from JiWire found that 44% of all age groups say that the availability of in-store wi-fi influences where they shop. 

In addition, according to an OnDeviceResearch survey 74% of respondents would be happy for a retailer to send a text or email with promotions while they're using in-store wi-fi.

This then opens up possibilities for location-based targeting of promotions while users are in store. Dave Wieneke provides some examples of how retailers can use precision marketing. 

Reward loyalty

Loyalty programs, reward cards etc, can keep customers coming back to stores, and the accumulated benefits offered may be enough to offset cheaper prices online. 

In the chart above, 14% say rewards would keep them off the showrooming habit, so this makes sense. Rewards can be also be linked to online accounts, so retailers can benefit whichever channel shoppers choose. 

Bring key online tools in-store

Such as reviews. They work a treat online, so why not use them at the point of sale in stores?  

This could be in the form of prompts to 'm-shoppers' so they can access them via QR or barcodes (or just a plain old URL) or actually displaying them, as in this mobile phone store:

Price matching

This is a risky tactic, and not one that's open to all retailers. It was employed by Best Buy in the holiday season last year. There were a few caveats (no obscure online retailers for one) but it's potentially an effective tactic. 

Make sure store staff have the knowledge

One of the reasons in-store shoppers turn to their mobiles is to find information, so why not make sure they can find out more in-store? 

If staff are knowledgeable enough to answer customers' product queries effectively, then they may not need to head online.

Use the advantages of a multichannel presence 

Retailers can't always match the likes of Amazon for price, but they should use the plus points of an offline presence to their advantage. 

These include: 

In-store pickup

This appeals to customers who like to do their research online but prefer the convenience of in-store collection and allows retailers the opportunity to drive customers into stores, where they may make other purchases, as well as saving them from the hassles that are sometimes associated with delivery. 

In-store returns

The smart online retailer will offer free and convenient returns, and customers will often prefer to buy items from a store where they can exchange them or receive a refund faster than they could via postal returns. 

Appeal to the 'want it now' mentality

Sometimes, if you want a product, you want it there and then, and offline retailers have this advantage over online rivals (though same day shipping services may begin to negate this advantage).

Retailers can make the most of this by offering the ability to check stock in local stores so customers can be sure they'll get the latest game or gadget when it's released. 

You can download the 'Showrooming and the Rise of the Mobile-Assisted Shopper' report here.