Retail marketing: The showrooming nightmare

Monday 13th, May 2013
in Retail

Retail marketing: The showrooming nightmare

The gap caused by digitization of marketing has got retailers across the globe worried. However, clever adapting to the situation can provide a lift to retail marketing.

Recently I indulged in a practice that has retailers everywhere worried. Having accidentally smashed my phone beyond recognition, I went over to a popular mobile retail store to purchase a new one. I didn’t have any specific brand or model in mind. So I looked around, trying to avoid overtly zealous salespersons. One particular model caught my fancy but the salesperson insisted that he didn’t have any more of those in stock and that I choose the higher end model instead (for a higher price, obviously). A half hour later, I was at home ordering a better model from the same brand on Amazon. So much for effective retail marketing.

Described above is a very typical example of an increasingly popular habit called ‘showrooming’. A significant number of consumers are choosing to do their research in brick-and-mortar stores, identifying what they want and proceeding to order it off online dealers offering competitive prices. From a customer’s perspective this is appealing for more reasons than one:

  • Availing best offers in the market
  • Convenience
  • Avoiding haggling and bargaining
  • Avoiding crowds and long lines at the billing counter

This, however, leaves retailers in the lurch. According to the Pew Internet & American Life Project survey, 12% of respondents said that they had opted for better deals online in 2013. Considering that barely half the year has gone by, this could be a significant cause of concern for retailers. Retailers have mostly been at a loss as to how to overcome this growing problem and optimize their retail marketing strategies. Some of them have resorted to measures such as levying fee for just browsing at the stores. Some of the not-so radical measures include:

  • Price matching (applicable to mostly large organizations such as Best Buy)
  • Product differentiation
  • Incentives, offers and discounts
  • Improved in-store experiences
  • Regular events to increase footfall
  • Leveraging the human element which is missing in the online experience
  • Location-based advertising to entice local shoppers

Maximizing value for customers is the only way to survive. While this can be done in many ways, the one fix that will stand out is if you manage to improve your customers’ experience in a way that benefits mostly the customer and incidentally you as well. For instance, let’s say there is a clothing store C that doesn’t have an online presence. The owner could benefit from just understanding the simple fact that individuals and their clothing needs are unique while the clothes are standardized to specific sizes. The staff can make a great difference by providing respectful, personalized attention to shoppers. This practice will essentially bring back the oldest form of one-to-one marketing. Instead of just trying to make a sale, they could assist in solving wardrobe challenges (like guiding gentlemen who want to shift from t-shirts to formal shirts) or actually fulfill specific needs (such as putting together a collection for a vacation). But most stores are staffed by indifferent personnel, increasing their sales woes.

Improving in-store experiences, however, needs an understanding of customer behavior inside the store. This can be carried out with the help of data from purchase histories as well as keen observation.

Everything said and done, it all comes down to one thing – are you providing value to your customers? Are you going above and beyond the act of making a sale to leave an indelible impression in minds of your customers?

Want to learn more about the ins and outs of introducing Customer Value Maximization in your Organization? Find out more through our services here


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