New survey data about “showrooming” may reveal weaknesses or trends that could have important implications for online or multi-channel retailers in at least three areas: product prices, product information, and customer service.
About 43 percent of Internet-using American adults have “showroomed,” examining or looking at merchandise in a traditional brick-and-mortar store only to buy an identical item at a lower price online, according to a Harris Interactive QuickQuery Poll conducted in June 2013. Showrooming has been an area of concern for many physical retailers, although others have seen the mobile smartphone-enabled trend as a form of shopping convergence.
The Harris Poll pointed out at least three interesting areas that Internet retailers — pure play or multichannel — may want to consider.
Showrooming Is Typically About Price
Nearly everyone (96 percent) surveyed in the Harris Poll indicated that price was at least somewhat important when making a choice to purchase from an online store. Some 82 percent of respondents said that price was either very important or extremely important when it comes to making an online purchase.
Here the implication is that online retailers may need to compete on price alone — or at least that is one reading of the data. While this might not necessarily be a weakness, competing solely on price can lead to relatively low margins and a higher barrier to entering the market.
The first possible implication — that competing on price leads to lower margins — may be obvious. If you have to sell products for less, but you still buy those products at the same cost, your margin shrinks.
Price competition may also make it more difficult for small retailers to begin selling a product at all. Manufacturers and distributors notoriously offer high-volume sellers lower prices. Some high-volume retailers may even sell products at cost or even at a loss, in order to own, if you will, a certain percentage of the market.
Online retailers might want to evaluate their value propositions and seek options other than price to engage shoppers and make sales.
Showrooming Implies Online Customer Data Is Not Sufficient
Shoppers in physical stores and online are much more educated about products, generally, than they have been in the past.
“Today’s shoppers have become accustomed to doing their own research to get the maximum value out of every dollar they spend, and to feel secure about the purchases they’re making,” wrote Google Senior Vice President of Ads and Commerce Sirdhar Ramaswamy in a recent whitepaper.
Yet showrooming implies that somehow all of this online product information and the research the modern shopper is doing even before entering the store is not enough. If it were sufficient, there would be no reason to come into the store at all. But for some purchases, shoppers still feel compelled to go into a store, even if they ultimately buy on the Internet.
The Harris Poll showed that 69 percent of shoppers who check prices from mobile devices “showroom” electronics, including computers; 48 percent showroom clothing and shoes; and 32 percent showroom media like books, movies, or music. These most-showroomed products could be a clue to what’s lacking in online product descriptions.
As an example, imagine shopping for a large, flat-screen television. Any good online retailer is going to have a lot of text describing the television and its various specifications. But if you simply want to see how good the picture looks, that is not conveyed in most cases. Thus, while it might be less expensive to purchase a television online, and while it is a lot more convenient to have that television delivered directly to your door, you still might go into the store just to see it in action.
Similarly, think about shopping for shoes. A good website will have a description of the shoe and many great pictures of the shoe, but unless you have it on your foot, it is hard to know how well it will fit.
Online retailers may want to think about ways to help shoppers get an in-store experience without actually having to go in-store.
Showrooming and Customer Service
Interestingly, the Harris Poll found that 70 percent of respondents would buy from an online store if they had a previous positive shopping experience, even if they could get an item for less from another, perhaps, less familiar source.
These findings reinforce some generally held ideas about the value of providing good or even great shopper experience and customer service.
It is also worth remembering that shoppers may have a higher bar for good customer service than retailers imagine.
Consider again that 43 percent of the respondents to the Harris Poll showroom. It is, perhaps, safe to assume that while at least some of the shoppers were standing in a brick-and-mortar store, smartphone in hand, Googling prices and product information, the occasional sales representative would approach, ask a question or two, and provide some valuable insight about a product. But, seemingly, that level of customer service was not enough to dissuade the customer from looking at a product in-store and buying online.
In short, online retailers need to “wow” customers, in order to create a positive shopper experience and entice them to not shop at a physical store to begin with.