It’s no secret that brick-and-mortar retailers are under intense pressure from online-only providers, many of which offer lower pricing on the exact same products that populate the shelves of traditional retail stores.
In 2012, two of the nation’s leading retailers, Target and Walmart, announced that they would no longer carry Amazon’s Kindle line in their stores. Although the decision to phase out Amazon Kindles may have seemed arbitrary to some, it was actually a backlash against Amazon’s perceived encouragement of a practice known as “showrooming” — the growing practice of consumers using retail stores to “touch and feel” products before purchasing from an e-tailer.
More symbolic than substantive, the refusal of Target and Walmart to sell Kindles will have little impact on either Amazon or the traditional retailers’ bottom lines. To seriously address showrooming, Walmart, Target and other brick-and-mortar retailers will need to find new ways to differentiate themselves and demonstrate their competitive strengths to consumers.
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The Showrooming Effect
Armed with smartphones and other mobile devices, today’s consumers browse traditional store shelves and perform instant online price comparisons for desired products. In some cases, consumers purchase the product from an e-tailer before they leave the traditional retailer’s store.
In essence, brick-and-mortar stores are becoming showrooms for online retail – and the practice may be more common than many retailers care to admit. According to a recent Empathica Consumer Insights Panel, 55 percent of smartphone owners have done an online price comparison during a brick-and-mortar shopping experience. Additionally, more than half of consumers report that they have used mobile devices to conduct product reviews or other online activities in-store.
Beyond the annoyance factor, the showrooming effect has the potential to commoditize the retail space and transform the retail industry into a price-only marketplace that favors online retailers’ ability to convert reduced overhead costs into lower prices.
Tips To Combat Retail Showrooming
Customer relationships hold the key to combatting the showrooming effect in brick-and-mortar retail. Since it’s impossible to compete against e-tailers on price alone, traditional retailers need to generate added value by focusing on the creation of exceptional customer experiences — the kinds of experiences that lead to personal, enduring relationships with customers.
However, many traditional retailers aren’t taking full advantage of customer experience opportunities. Rather than recognizing the unique value characteristics of traditional retail, consumers are often dissatisfied with the brick-and-mortar shopping experience.
By targeting specific areas of consumer dissatisfaction, brick-and-mortar retailers can significantly improve the customer experience and leverage differentiation as a way to compete with online retailers.
1. Service
Traditional retailers frequently tout service as a primary competitive advantage. But unfortunately for big box retail customers, this isn’t always delivered. Approximately one in five consumers report big box sales associates can’t adequately answer questions in their areas of expertise, and 39% don’t feel as though employees even listen to them when they ask a question.
To compete in the current retail environment, in-store associates need to be properly trained in customer service fundamentals as well as in their designated area of expertise. In addition to improving the in-store customer experience, the presence of knowledgeable and trained sales associates can deliver other benefits to the brand, including increased basket size, revisit rates and recommendations of the brand to friends and family.
2. Personalization
Large online retailers like Amazon specialize in highly personalized shopping experiences. When they shop in-store, consumers expect the same degree of personalization. Empathica research shows that two in five consumers feel that big box retail lacks personalization — and that’s a problem because personalization is the driving force behind loyalty and brand advocacy.
There are several strategies retailers can employ to add a personal touch to the in-store experience. In addition to emphasizing personal interactions with friendly and helpful sales associates, brands can offer “click-and-brick” opportunities that encourage shoppers to engage with the brand’s own online resources during in-store experiences.
By leveraging QR codes, targeted offers and other tactics, click-and-brick opportunities provide consumers with the personalization features they experience online as well as the ability to interact with physical merchandise.
3. Employee Attitude
Robust customer experiences hinge on positive interactions with in-store sales associates. But just 38% of consumers are left with the perception that big box retail employees enjoy their work, revealing serious concerns about the impact employee attitudes are having on the brick-and-mortar experience.
Targeted improvements in employee satisfaction and engagement should be a high priority for all retailers. Leading brands are finding creative ways to utilize internal apps and other technologies to stay connected with sales associates and recognize employee achievements in real-time via social media channels.
4. Consistency
When consumers visit retailers, they expect the customer experience to be consistent across multiple locations. Regardless of where they shop, they want the brand’s in-store experience to be familiar and to provide the same, high quality features they have enjoyed during previous shopping excursions.
Customer experience management technologies equip chain retailers with the tools and resources they need to deliver consistent customer experiences. With the right solution, retailers can deliver on consumers’ expectations and dramatically improve customer experiences across geographically diverse store sites.
Too often, retail brands focus on price when competing with online retailers. Although price is clearly a concern, it isn’t the only factor consumers use to make purchasing decisions. In reality, consumers evaluate a variety of elements that combine to create the customer experience.
By shifting the focus to the development of exceptional, consistent and well-rounded customer experiences, brands can forge personal and emotional connections with consumers — and leverage their natural advantages over Amazon and other online retailers.