Capitalizing on reverse showrooming

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Clearance prices but limited inventory at a Staples store

Note: This post is a commentary on a recent Business Intelligence Report “Reverse Showrooming: Bricks-and-mortar retailers fight back” available for a free download here.

Introduction
In my post, “The Power of Amazon”, I outlined a frustrating trip to a brick-and-mortar store, in this case Target, leading me to believe that an e-commerce giant like Amazon could take over our lives one day. In my case, it is certainly true for non-perishable household items (although I have bought almond flour from Amazon before, finding the local grocery store’s to be too expensive); small appliances and office supplies. When it comes to clothing and shoes however, my tendency has been to either reverse showroom (browse online and buy in-store) or order different sizes online and return by mail.

According to the BI report, reverse showrooming or webrooming is actually more common than showrooming.

“In the U.S., 69% of people have reverse showroomed, while 46% have showroomed, according to a Harris poll.” (BI report)

Furthermore,

“…more millennials prefer to reverse showroom” especially “for electronics, shoes, sports equipment, and cosmetics.” (BI report)

I will not discuss the methods by which the poll was conducted or the overlap between people who showroom and webroom – the report indicates that showroomers, being heavy researchers, are actually more likely to convert to webrooming. What I will discuss is how retailers can capitalize on reverse showrooming and add to the initiatives mentioned in the BI report.

Reasons for reverse showrooming
First what are the pain points of shoppers who eventually reverse showroom? According to the report, these are:

  • Shipping costs associated with online purchases
  • Touch and feel of the item
  • Inventory (customers check online to see if an item is available at their local store)

Inventory to me is partly related to touch and feel – I want the item but I would like to see how it will look on me and I want to make sure it’s available at the store closest to me. On top of these, I would like to add a few more:

  • Sizing – very few online stores give a good indication of fit although stores like Macy’s and Nordstrom have recently incorporated True Fit technology to their sites; I have discussed this on my post here on e-commerce best practices
  • Better sale prices – especially true if you follow email lists such as Off Saks Fifth’s More membership
  • Social experience – shopping becomes an excuse to meet up with friends

Initiatives to capitalize on reverse showrooming
We are still quite far from installing robotic arms that will bring clothing items to the fitting rooms and/or interactive dressing rooms where shoppers can ask their social network in real time for their opinions on an item in question. In the meantime, brick-and-mortar retailers can fight showrooming and capitalize on webrooming instead.

  • Set up stations for customers to search for items in store. This is similar to what you find in a bookstore where you can search for a book and the terminal tells you the availability and the location of the item within the store. This would mean that the location of items will either be relatively static or that the software handling the queries can be easily updated. This will allay the frustration of wandering around aimlessly in the store looking for an item, only to find that your size is not available. Those are the times that make me want to swear off brick-and-mortar shopping altogether.
  • Have each salesperson carry point of sale devices. Due to the popularity of Apple, shoppers are already quite familiar with salespeople carrying POS terminals that allow them to checkout and have the receipts emailed to them.
  • Allow for self-service checkouts. Self-service checkouts can quickly convert one-item impulse buys for shoppers. I can’t count the number of times I’ve waited in line, hesitating with 1 or 2 pieces, and finally deciding to abandon them after only a few minutes of waiting.
  • Hire more stylists/salespeople. There are the menial tasks of working in-store that can’t be avoided but in order to add value to store services, having “stylists” at hand can help customers make decisions and also result in cross- and up-sales. They are not similar to personal shoppers in designer stores but they can offer alternative choices to a shopper who may be looking for something in particular, e.g. a big date night, work presentation.

I would like to add that having ubiquitous POS, whether they are self-serve or with salespeople, means that shoppers can have the option of signing in to their accounts for easier checkouts. Most shoppers already have online accounts on the stores/brands that they love, however the POS should also allow them to sign in as guest as well. Not only does the store gain information (creating customer profiles); it also becomes a paperless transaction.

Conclusion
As much as brick and mortar stores continue to serve an important purpose and value add to shoppers, they have to integrate technologies that will make their operations more efficient and relevant to tech-savvy consumers of all ages. This is true even for stores who have omni-channel operations if they want their brick-and-mortar counterparts to continue to turn a profit. This is especially true if they’re going to face competition from pure e-commerce giants and logistics experts like Amazon and Alibaba who are now pursuing physical stores.

While Bezos is still contemplating opening stores for select products in some cities:

“We would love to, but only if we can have a truly differentiated idea.” (Jeff Bezos in an interview with Charlie Rose)

Alibaba has already executed on this strategy with its recent 26.1%  investment stake  in offline retailer Intime Retail Company. When it comes to getting consumers to spend, whether it’s online, offline or both, only the fittest (better technology and more value added services) will survive.

Food for further thought
Will online retail always keep a cost advantage (see Amazon’s low profit margins)?

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2 thoughts on “Capitalizing on reverse showrooming

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