Buzzwords can be tough to keep up with. Especially if you're in retail and can't spend hours figuring out what each word means, how it affects your business, and what you can do about it. Two words in particular that I'd like to tackle are "showrooming" and "webrooming."
Yes, we all know that consumer shopping habits are changing, that they're equipped with smartphones, using online reviews to form their opinions, and have preferences for what kind of products they purchase online, in-store, or online and pick-up in-store.
Big box retailers have boatloads of cash to throw at the problem of catching-up with consumers and their demands, however, as a small business owner, things can be a little more complicated.
In this post, I'll be exploring what "showrooming" and "webrooming" are, how they effect your business, and what specific steps you can take to combat or welcome their impact on your store.
Here we go.
Defining the Mobile-Assisted Shopper
Before we do a deep dive into what those two trends are, let's start with doing a round-up of what we presently know about mobile-assisted shoppers.
A report by the Columbia Business School broke down five different types of mobile shoppers as follows:
Also, here's how they break down in terms of age:
Lastly, here are the top three main mobile activities and their frequency performed in-store:
Now that we have a better idea of who the modern shopper is and some of their behaviour in-store, let's breakdown showrooming and webrooming.
What Is Showrooming and Webrooming?
According to techopedia, showrooming can be defined as the following:
"Showrooming is when a shopper visits a store to check out a product but then purchases the product online from home. This occurs because, while many people still prefer seeing and touching the merchandise they buy, many items are available at lower prices through online vendors. As such, local stores essentially become showrooms for online shoppers."
And, here is a definition of webrooming by Dr. Gary Edwards from Empathica:
"Webrooming is the opposite behavior to 'showrooming.' With showrooming, retailers are faced with the challenge of customers coming into the store to browse and test products, only to subsequently go home and actually complete their purchase online (often through a competitor.) Webrooming, on the other hand, is when consumers research products online before going into the store for a final evaluation and purchase."
Showrooming Vs. Webrooming
Up until recently, there was a lot of gloom and doom talk about how showrooming was eating into the profits of retailers, and that their was nothing they could do to combat its impact. However, retailers have fought back and employed several means to offset showrooming's impact, and the result has been the rise of webrooming.
According to a Harris poll in the U.S., 69% of people webroom, while only 46% showroom. Some of the primary reasons for this have been offline retailers understanding the importance of omni-channel selling, resulting in the adoption of an ecommerce storefront, in addition to a focus on providing a better in-store customer experience. Whether that's through tactics like knowledgable sales staff, in-store pick-ups of online orders, in-store Wi-Fi, or smartphone discounts nudging shoppers to buy in-store, webrooming is creating waves in retail.
A good question to ask is what is it exactly that makes customers want to come in-store to make or complete a purchase? Luckily for us, a report by Merchant Warehouse had some great insights to help us better understand the trend. According to them, here's a few reasons customers would webroom over showroom:
- 47% don't want to pay for shippings
- 23% didn't want to wait for the product to delivered
- 46% like to go to a store to touch and feel a product before they buy
- 36% will ask the store to price match a better price found online
- 37% like the option of being able to return the item to the store if needed
In the next section, I'll look at how retailers can turn those pain points into opportunities for their retail store and bolster their business with an online presence for a complete experience.
What Retailers Need to Do
So with all the changes in consumer shopping behaviours, I've compiles a list of the top three things that you as a retailer can do to keep up in order to take advantage of both showrooming and webrooming trends in an effort to build better customer relationships and ultimately increase your bottom line.
1) Go Omni-Channel
According to Retail Touchpoint's global survey of customers, 60% believe that multiple retail channels including web, social, mobile, and physical retail will be the norm for most stores. If you want to keep up with those expectations, Shopify makes it really easy with our ecommerce and POS software.
Also, as a bonus incentive 56% of their respondents said they would spend more money at physical retail stores if those locations enabled shoppers to browse through their merchandise online first.
2) Engage Customers with Great Service and Incentives
Human interaction is still a vital driver behind why consumers in certain cases still prefer to purchase products in-store versus online. For example, a 2012 Nielsen poll indicated that 69% of its respondents thought in-store purchases were "most reliable," and 68% said it was the "easiest" and the "most convenient" way to shop.
Retailers can take advantage of this by increasing interaction between sales staff and customers and making it easier than ever to return, exchange, or refund products.
Here's more data from the Columbia Business School study about what actions retailers can take to increase store purchases:
3) Engage Shopper's Opinions
Shoppers are already on their mobile phone when in-store, why not take advantage of it? Research shows that 23% already post updates to a social media service while in-store while 19% have checked in with a location-based service like Foursquare.
Why not ask them to like your Facebook page, take a photo with your apparel and tag it with your branded hashtag on Instagram, or share their purchases on Twitter? You could incentive this through contests, giveaways, coupons, and other creative promotional campaigns.
Here's a look at consumer's interest levels in various mobile activities relating to your brand:
Lastly, Embrace Customer Habits
Consumers will continue to evolve alongside technology, it's time that businesses own up to the fact that in order to stay competitive, relevant, and most importantly, profitable, you have to keep up. Hopefully this post shed some light on two very buzz-worthy trends and highlighted some practical take-aways for your business.
To summarize, here's a beautiful infographic from Merchant Warehouse showcasing the most insightful data from their report:
P.S. If you liked this post, you'll love 10 Slideshare Presentations on the Future of Retail and How Retailers Manipulate Sight, Smell, and Sound to Trigger Purchase Behaviour in Consumers.