In the battle against showrooming (looking at items in a High Street shop then buying them at the cheapest store online), retailers must understand what drives choice as to whether people buy online or offline. We all want a good price, but most people are satisficers, happy with a fair price and good service.
However, some people are mqaximisers who look for the best price. And increasingly, as people have constant access to the internet via their smartphones, maximiser behaviour becomes easier and therefore more common.
Depending on their sector, retailers need to make a call about how aggressive they need to be about combating showrooming. This is because aggressive tactics such as price matching generally cost money.
For instance, the physical look and feel of products is less important to people buying consumer electronics than it is to (most) people
buying clothing. Thus showrooming is less of a problem to fashion retailers than it is to TV retailers. TV retailers need to be more
aggressive in their strategies.
So how can retailers defend themselves against showrooming?
Well, first of all it is important to accept that, just as there are people who will always prefer a favourite shop, there will always be a proportion of shoppers whose “hobby” it is to find the cheapest price. These pricing “maximisers” are not a majority however.
The real opportunity for many retailers is the mid ground – where people who would normally buy in a High Street shop might get seduced into showrooming behaviour because they have a smart phone with them.
There are three “zones” that retailers need to address, depending on how aggressively they want to combat showrooming: a zone of support, a zone of defence, and a zone of attack.
In the zone of support retailers are addressing “hygiene” factors that all shoppers will expect: shops open at expected times, sufficient stock, an easy way of browsing different items, and reasonable prices combined with the expectation of good service. Failure to address these factors will simply mean shoppers choosing another shop, online or offline.
Then there is the zone of defence where retailers can start to guard against showrooming by emphasising what is good about High Street shopping. Here an important tactic is making sure shops are pleasant places where friends can indulge the important leisure activity of shopping; but equally important is the provision of information that helps people make the right choice: “don’t give me choices, make it easy for me to choose”. And this is where the use of geotargetting of promotions – to drive people into shops and keep them there – comes into play.
Good defensive actions should keep most shoppers, who are increasingly carrying mobile web browsers with them (in the form of smart phones), happy to shop in store.
Retailers who feel they are suffering badly from showrooming need to take more aggressive actions. They need to enter the zone of attack where they can specifically combat online retailers who offer keen pricing.
This doesn’t have to be about price matching (although of course that helps). It is possible to dilute the effect of low online prices by
offering bundles of products or loyalty points with immediate and clear benefits. This makes comparing prices harder, and less of an
issue. Another thing that drives people online is queuing to pay – and here roving payment stations can be effective. And of course if your shop is shut then people are forced to look elsewhere so a good online shop (ideally easily accessible from the High Street shop) is also essential.
Most retailers will always suffer from some showrooming: but for many the problem is smaller than they may fear, and there are effective strategies that can be put in place to minimise the effects. The main choice to be made is just how aggressive those tactics need to be.