‘Tis the season for shopping. But while the malls are bustling, not all those people are buying – at least not in the store. The bane of traditional retailers is a trend called showrooming. It means customers see and touch the item they want, scan the barcode with their phone, then order it elsewhere – and often cheaper – on-line.
It’s a huge problem. A recent Harris Interactive survey found that 43 percent of U.S. adults have “showroomed,” and a study from research firm ClickIQ showed half the shoppers who buy on-line checked the merchandise in a store first. To be sure, it results in significant losses for brick and mortar stores.
Traditional retailers are fighting back, of course. Big ones, such as Target and Best Buy, offer more proprietary products. Where else, after all, will you buy an Insignia (Best Buy brand) TV? Some stores have taken more extreme measures, such as covering product barcodes, but that rarely works, and reiterates to customers that there may be better deals elsewhere. Price matching can also level the playing field, though that makes a lot of store owners see red (as in ink).
A Walmart manager recently spoke to my class. He said his company actually embraces showrooming for two reasons. First, Walmart competes well on price – a high percentage of those customers will come back to buy the product. And second, when they do, it’s another trip to the store – and another chance for the shopper to buy even more.
But retailers in some markets now have another trick up their sleeve: Same day delivery. Walmart, Target, Office Depot, Best Buy and others are realizing something they can offer that Amazon, E-Bay and others can’t is the promise to put the product into customers’ hands within hours. This can only happen in select areas, but nearly instant gratification may prove an effective weapon in the war between traditional and on-line merchants.