Showrooming, the trend whereby consumers, use their mobile phone to compare and research a product and then purchase it online, often while standing in the physical store, is on the rise in the UK and other markets in Europe. In part, encouraged by apps such as eBay and Amazon, it has emerged as a key element of the purchase funnel and is undoubtedly here to stay.
Understandably, showrooming remains a key concern to retailers faced with increased competition and lower revenues as they attempt to keep up with the lower prices which consumers have become accustomed to finding online. But is it entirely a threat, or can it be turned into an opportunity?
Mobile devices themselves are now playing a pivotal role on the ‘path to purchase’ – acting as both ‘entry’ and ‘exit’ point to the purchase process. Showrooming is a natural part of that path and advertisers and retailers alike need to understand the role that mobile now plays in facilitating this kind of behaviour. Brands must act on this and ensure that they engage, on mobile, at the beginning and the end of the journey if they are to influence the purchase decision.
Indeed, as 4G becomes increasingly ubiquitous, it brings both opportunities and obstacles to brands and retailers. On the one hand its faster download speeds mean that showrooming is easier than ever, but by contrast this also means there is an opportunity to user richer more engaging advertising content.
4G is also facilitating a rise in m-commerce that could result in a drop in foot-fall in stores. However, one silver lining is that these 4G pioneers are beginning to show a greater acceptance for mobile advertising, which, handled in the right way, opens up opportunities for brands to engage with a receptive audience. This very ‘mobile-centric landscape’ means that retailers need to take full advantage of mobile’s capabilities to engage consumers at the critical first stage of the purchase path to gain the upper-hand over it showrooming.
To date, retailers have struggled to find effective ways to retain customers – an Australian food shop for example, introduced a $5 charge for using wifi in store in an attempt to prevent customers showrooming. Some stores in the U.S. have introduced ‘fitting fees’ with the fee then taken off the final purchase bill, if they make it in-store. Showrooming has been attributed as the source of these drastic measures, but is there such a need to resort to these measures and are they effective?
There are several more effective tactics that brands and retailers could implement to regain control of showrooming and even embrace it. Firstly, advertisers should leverage mobile to its full extent, working with retailers to offer free wi-fi in store (if 4G is not available) and providing a mobile-optimised landing page that showcases their products.
Retailers who also have their own mobile application have more chance of chanelling consumers in their direction. This has been shown to be effective by Walmart who have focused heavily on mobile apps and mobile-optimised sites. The company now achieves 12% of its online sales through its mobile website from consumers who are already in a Walmart store. By engaging positively with customers through mobile, retailers can embrace the showrooming trend by ensuring that consumers stay in their brand-space and not competitors.
Geolocation is another tool to consider using to drive consumers to a mobile site, allowing retailers to take advantage of the opportunities created by the showrooming trend. Technology is developing at a rapid pace with the emergence of geolocation tools like Weve’s messaging-based service You Are Here and Apple’s iBeacon coming to the market.
By identifying individual consumers as they enter the shop it offers retailers the opportunity to engage shoppers with relevant push-notifications and offers, (although a careful balance must be made between being useful and being intrusive). Brands, including retailers, will need to ensure that their messaging is relevant, engaging and useful to the consumer in order to drive sales and engagement with the brand.
As with all consumer-focused matters, cost remains king – this makes incentives particularly important for retailers and one of the simplest methods for retaining customers is through vouchers and coupons. Research from Orange in its 2013 Exposure report found that vouchers and coupons were the most popular advertising format for consumers in the UK, France and Spain across PC, mobile and tablet devices.
This is especially true for hi-tech purchases. For example, in the UK high tech sector, among the 52% who purchased their high tech product online, 10% used a coupon. The message is clear: ticketing and voucher-led loyalty programmes offer an opportunity for advertisers to increase loyalty and potentially influence the end purchasing decision.
Showrooming is here to stay for the foreseeable future, however, with a mobile-centric approach, brands and retailers can turn it to their advantage. It’s there for the taking, and now is the time to grasp mobile with both hands.