Posts Tagged ‘ecommerce’

By Rieva Lesonsky

Are you scared of showrooming? If you’re a small retailer, you have reason to be. The trend in which consumers visit a physical store, look at products they like, use their mobile devices to find better deals online and then buy the products elsewhere, has spurred a frenzy in the retail world.

Showrooming & The Cost Of Keeping Buyers In-Store, a new study from GroupMNext reported in MediaPost, isn’t going to calm the frenzy. The study found that a discount of as little as 2.5 percent online will spur 45 percent of brick and mortar customers to leave and complete their purchase online. For a savings of 5 percent, 60 percent of customers will leave and buy the product online. Up the online discount to 20 percent, and a mere 13 percent of shoppers will stay to make their purchase in the store.

While the Internet used to be the first step in research conducted at home and leading out to the retail location, the report concludes the process is now reversing itself, with customers doing research in stores and returning home to make their purchase.

The study also found some surprising things about showroomers. While you might expect them to be young, tech-savvy men, in reality they’re most likely to be young women who frequently shop online. Also surprisingly, the customer most likely to stay and buy in-store is an older man.

If you have a brick-and-mortar store, what can your business do to keep customers there?

• Customers who look at product reviews on a mobile device are the most likely to showroom. Keep an eye out for people checking a mobile device in the store, so you can have salespeople approach them and offer help.
• Offer help to everyone—the study found that customers who interacted with an employee in-store were 12.5 times more likely to make a purchase there.
• Focus on the immediacy of purchasing in-store. Even a customer who wants the online discount may be swayed if you can sell her on the benefit of having it in-hand quickly instead of waiting for it to be delivered from an online retailer.

In addition to the core 10 percent or so of shoppers who seem unlikely to ever stop buying at physical stores, there’s also a “marginal showroomer” group that has high potential for retailers. The report says these constitute about 10 percent of customers and that they are price-sensitive, but can be convinced to stay in-store too. The average “marginal showroomer” is male, age 52, with an average income of $60,000 and a tendency to shop online at least once a month. You can reach out to these customers with targeted emails, direct mail and other marketing efforts to encourage them to come into the store, knowing that once there, they’re less likely to leave.

Image by Flickr user jheffrey swid (Creative Commons)