Can Retail Make Room For Showrooming?

Retail stores have had to deal with an increasing threat to their sales as smartphone ownership has crossed 50% and more consumers are using stores as a “showroom” before buying goods online. This especially became a problem for retailer Target when Amazon offered a 5% discount to anyone who used their Price Check app to scan a bar code of an item in a store and then bought it from the website. As a result, Target dropped Kindle from shelves saying, “What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices.” Not too long after Walmart followed suit by dropping Kindles from their stores.

How big is this problem? A recent survey says 50% of respondents with smartphones research prices while in store, 1 in 3 who research prices leave and buy from a competitor, and 96% plan to “showroom” in the future.

So what can retailers do? An article in Forbes suggests three strategies:
1. Begin a strategic conversation between brands and retailers. Through dual distribution or multichannel marketing they often end up competing against each other. Big retailers such as Best Buy need to develop exclusives to keep customers coming and buying. Tom Van Riper from Forbes said this is how Barnes & Noble kept Amazon from closing their business by developing the Nook.
2. Embrace customization as a key area of strategic growth. Large shoe brands such as Reebok and Nike are seeing revenue numbers in the $100 million range with their custom shoe programs.
3. Focus on the customer experience. Forrester research says 35% of shoppers want to purchase custom products to stand out from their peers. But also consider custom buying experiences for long term loyalty and engagement.

Mashable suggests innovation as another way to battle showrooming and talks about a store in Australia which started charging consumers $5 just to walk into the store. Before you start a retail cover charge also consider new digital marketing services that engage shoppers to entice them to stores. For example, Target has announced plans to price-match online competitors, such as Amazon. And Brian Gillespie, principal at a service design firm, suggests encouraging “webrooming” (the opposite of showrooming) where shoppers search for products they want online, and then head into the store to make a purchase.

Gillespie makes a good point. It comes down to retailers creating an in-store experience exceptional enough to keep consumers purchasing in-store. The kind of customer service Nordstrom offers and enhanced with digital environments. But will that kind of service draw a crowd for toilet paper at Target the same way it does for Eau de toilette at Nordstrom?

Do You Look For Wrongs Or Rights? Social Media Works for B2B.

Over the course of my career I have worked in many different office environments. Advertising agencies have unique cultures, but inside of the general category they vary greatly. But you’ve probably noticed these characteristics in your office or in yourself. Some people always look for what is wrong with an idea, a proposal, campaign, project, etc. Their first inclination is that there must be something wrong and you get the sense they enjoy finding flaws (no matter how minor) and enjoy shooting entire ideas down for it. Have you ever had a boss, a co-worker, or worked for an entire company with that mentality? How many innovative ideas or programs ever saw the light of day? The fear of failure rules those cultures. Expressing your concern, puts you on the record as spotting a flaw in case it does see the light of day and fails – you’ve covered your but. All the while these same people read about successes in the trade press and wonder why they can never get there.

On the other hand, I have worked for and with people who embrace risk over safety, because they know that is where greater reward is to be found. In fact, they know if people find a lot of reasons not to do something, that is a sign that it could be great. Social Media in general falls into this category, because it represents such a dramatic shift in thinking. Marketers must give up control. No one is really concerned about running another newspaper ad, but letting your consumers talk for you, or your employees is a risk. But the truth is they are doing it anyway. Don’t get me wrong, any plan should be vetted and optimized to follow best practices and increase the chance for success. But that kind of thinking comes from finding the “rights” of the idea first, before the “wrongs.”

Sometimes embracing the risk of social media to gain reward requires more than approval, but a change in policy. I once worked for a client that wanted social media ideas. We listened and presented innovative ways to share valuable information (they already had, but very little were using) via social media networks that would utilize their managers and help them generate sales leads through Facebook, LinkedIn and Twitter. They loved the idea, the only problem was that they had a corporate policy to block social media access on managers computers. End of idea – back to cold calls. The eMarketer chart above shows the percent of marketers who have overcome outdated policies and are using social media to generate leads and sales.

A recent article in Forbes speaks to this issue. It is written by bank CEO Frank Sorrentino and he calls other bank CEO’s to join him in social media – many in the financial industry are not there. He acknowledges the risks, but points out that you can learn ways to manage them. On the other hand, Sorrentino warns that there are risks in not joining social media. If you are looking for reasons not to do social media (wrongs), you will find plenty. But I encourage you to change your focus and look for the reasons to do social media (rights) – that is the only way you will reap its rewards.