What marketers can do about Showrooming
I recently read a news article about how target trains bull-eyes on showrooming. Target has taken many strategic actions to react to this increasing phenomenon, such as starting to provide in store wifi, rolling out in-store pick up of online order, start a social media digital savings program called Cartwheel that the company built by partnering with Facebook.
http://www.startribune.com/business/227443331.html
Here are my takeways that what marketers can do with the showrooming.
There are two major marketing implications with the showrooming phenomenon: strategies marketers can take to avoid showrooming, and strategies they can take to benefit from it.
Avoid Showrooming
Marketers can implement a number of different tactics to mitigate showrooming, such as impulse buying, closing price gaps, and replenishing inventory.
Impulse Buying
Marketers can avoid showrooming by encouraging impulse buying to reduce the rational decision process. Impulse buying occurs when a person experiences a sudden urge to purchase a product that he or she cannot resist. To increase impulse buying, marketers should create exciting point-of-purchase stimuli. These promotional materials are likely increase impulse buying in the store and decrease showrooming
Close Price Gap
Marketers can also consider lessening the price gap between online and in-store retailers to eliminate the expectation consumers have about online retailers having a better price. As previously mentioned, shoppers will leave the store and purchase a product online for a price difference as low as 2.5% .Therefore, marketers should try to eliminate the motivation for buyers to search for products elsewhere by offering more competitive prices.
Replenish Inventory
Ensuring enough inventory can decrease the motivation for buyers to purchase products online. Sometimes shoppers find it frustrating to know that the products they want are out of stock, and thus turn to ordering online as their solution. To solve this problem, retailers should replenish stock levels to match buyers’ demands. However, the cost of storing inventory is high, so marketers can consider offering a delivery service to its consumers as an alternative. For example, Aldo Shoes offers free delivery to consumers’ homes if the store runs of inventory It is easy, convenient, and can motivate buyers to make more in-store purchases.
In-Store Exclusive Promotions
To create more in-store purchases, marketers can offer exclusive promotions that buyers can only get in stores (Stevens 2012). To stimulate consumer purchases, retailers can provide free gifts with any purchase, or even limited edition products sold in-store only. These promotions not only encourage in-store purchases, they also increase customer loyalty by increasing the likelihood that these customers will return.
Post-Purchase Satisfaction
Consumer satisfaction/dissatisfaction is the overall feelings or attitudes a person has about a product after it has been purchased. The greater the post-purchase satisfaction of buyers, the greater the likelihood they will return to the store again. Marketers can increase consumers’ post-purchase satisfaction by offering loyalty programs, a convenient return policy, or send thank you gifts to loyal and valued customers. These offers make buyers feel that the company is valuing them, and the stellar customer service can form interpersonal relationships between the seller and the buyer, something not likely to occur in online transactions.
Store Image
The last strategy marketers could use to avoid showrooming is to build store image to encourage in-store purchases. Store image can be referred to the store’s personality, which composes of the store’s features, location, merchandise suitability and the knowledge and congeniality of the sales staff. For example, knowledgeable sales staff can provide relevant advice to buyers, and buyers may be willing to pay a little extra for this service that they cannot get through online shopping. Moreover, store atmosphere is another significant part of store image as it can evoke certain affects in buyers. These dimensions include colors, scents, and sounds. For example, Abercrombie & Fitch associates its products with an Abercrombie fragrance to create its signature scent, something known as scent marketing. Strategic scents have been proven to increase the shopper’s dwelling time by as much as 40% in retail environments and can increase sales from 20 to 90%
Approach Showrooming
Although many marketers are currently trying to persuade their customers to move away from showrooming, there are many opportunities for online retailers who are looking to take advantage of the trend. These retailers could possibly use showrooming to position their company on the basis of price, as they try to offer lower prices compared to their brick-and-mortar competitors.
Online retailers can also provide customers with easier access to their discounts and coupons by offering their own mobile device applications. For example, Amazon currently has a mobile application which allows consumers to scan the barcode of any item in physical stores, and immediately shows the consumer the cheaper price that is offered on their website. The mobile application should be consistent and always offer the consumer a lower price than what is presented to them in a store, and this will increase the customer’s satisfaction with the online retailer and encourage consumers to repeatedly purchase using their computers.