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How to leverage mobile to combat showrooming

May 31, 2012

Retailers are using check-ins to address showrooming

While the growth in smartphone penetration has made it easier for shoppers to compare prices among competing retailers while in-store, mobile devices can also offer a solution for merchants looking to combat showrooming and make sure they close the sale.

Retailers are increasingly concerned about the practice of showrooming, or using a bricks-and-mortar store to investigate an item and then making a purchase from another retailer after finding the best price online. Following months of hand-wringing over what to do about showrooming, retailers are beginning to take action and are coming up with strategies for the upcoming 2012 holiday season with an eye toward discouraging showrooming.

“Retailers realize that they probably can’t prevent showrooming from happening,” said Martin Hayward, director of marketing at Mirror Image Internet, Tewksbury, MA. “People have done it for years online and are going to continue to do it.

“Retailers are looking for ways to entice that shopper, if they are going to do showrooming, and convert them into a customer so that as they walk out of the store, they are now buying that product at the store through the mobile device or at the checkout with a coupon on the mobile device,” he said.

“We are going to see a lot more of this activity as we get closer to the holiday season – it is a part of retailers’ strategies now.”

Proactive stance
Showrooming is a major headache for retailers, with recent research showing 71 percent of shoppers compare prices in electronics stores and 49 percent of online customers have visited a store to learn more about a product, then bought it online, per Mr. Hayward.

Amazon’s Price Check mobile application, in particular, is a source of concern for retailers because during the holiday season the ecommerce giant offered a five percent discount to shoppers who made a purchase using the app.

However, since shoppers were already actively engaged in comparing prices for products via mobile devices before Amazon joined in and this shopping behavior is only going to become more prevalent as mobile penetration increases further, it is important retailers take a proactive stance and deal with the issue head on.

Retailers are concerned about the Amazon Price Check app.

One of the strategies that retailers can use to combat showrooming is giving shoppers a way to check-in at a store using a mobile device. This enables retailers to reward customers for shopping.

For example, Target recently began using the shopkick app, letting customers earn points as they walk around a store or scan a product. The points, or “kicks,” can be redeemed for various rewards.

Mobile to the rescue
Retailers can also deliver a coupon based on a shopper’s purchase history to their branded app that can be scanned at checkout for purchases made in the store.

Per Mr. Hayward, some retailers are considering accepting coupons delivered on a mobile device from another retailer when a shopper presents the coupon on their phone at checkout.

Retailers can also enable in-store shoppers to purchase items that are not available on the store shelves using the app.

One strategy is to offer free shipping to users who make a purchase online while in a bricks-and-mortar store using the app.

“There are apps out there the enable these types of features and retailers are taking advantage of this technology because they see showrooming as a real threat,” Mr. Hayward said.

Retailers can also leverage location-based technology to market to consumers in nearby stores to drive foot traffic and use device detection to deliver correctly formatted ads to consumers with the highest purchase intent.

Savvy retailers are heavily promoting their mobile apps through social media sites and elsewhere to drive downloads and boost their efforts to combat showrooming.

Enticing the customer
Some non-mobile related tactics for addressing showrooming include highlighting that shoppers do not always get the same service as they would in a bricks-and-mortar store when they purchase something from an online retailer.

Other best practices include offering exclusive items that can only be purchased in-store from a particular retailer, such as Best Buy does.

Additionally, store associates should be encouraged to approach in-store shoppers who are using their smartphone to compare prices and try to assist the shopper with guidance that goes beyond price.

What is key for tackling showrooming is that retailers recognize that shoppers may not make a purchase at the time they are in the store. Instead, retailers need to look at such visits as an opportunity to engage shoppers using their mobile devices.

“Showrooming is very challenging for a lot of the bricks-and-mortar retailers,” Mr. Hayward said.

“You can’t really stop it if it is happening on the showroom floor and shoppers are probably doing it online as well,” he said. “It is not going to go away anytime soon.

“However, there are things that bricks-and-mortar retailers can do to entice the customer to buy the product.”

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