Embracing “Showrooming”

By Jon Bird

Over the last few years, “showrooming” has received a bad rap. This is the practice where a smartphone-enabled shopper goes into a physical store to touch and feel the merchandise, gets expert advice, and then compares prices on their device and purchases online elsewhere. The classic example is of a customer visiting a Barnes & Noble bookstore, checking out the latest novel by Stephen King, asking the associate for his opinion, and then buying on Amazon.
A new generation of retailers and brand-owners, however, has embraced the showrooming concept and taken it to a whole new level. On a recent retail expedition in and around New York’s SoHo shopping district, I saw numerous examples, and four caught my eye:

Samsung Galaxy Studio – a warehouse-style space filled with the latest Samsung devices, and not a single one for sale. The idea is for shoppers to play with the product and they get rewarded for doing so. Customers collect points for stopping at each “experience station”, and receive free merchandise as prizes at the end. Highlights include a Design Studio, where you can create your own t-shirt with the help of a Samsung Galaxy Tab, and a café where you can order a complimentary cappuccino and pastry via a Samsung device.

The Sound of Porsche – new brands like automotive darling Tesla have stolen some of Porsche’s cool, and this pop-up in the Meatpacking District (now closed) was part of an attempt to get it back. The temporary installation was dedicated to selling the sound of the iconic brand. Set up like a vinyl record store, customers could listen to classic car soundtracks, and in the Sound Studio hear the distinctive thrum of the engine and project accompanying visuals onto the surface of a 9-11.

Story “Tech & Style” with Intel – Story is a “retail space that has the point of view of a magazine, changes like a gallery, and sells things like a store.” Every 6-8 weeks, the entire story of the store changes – every fixture, every fitting, and every product. Right now the featured “story” is a collaborative effort with Intel, showcasing tech both “on the outside” (e.g. gadgets) and “on the inside” (e.g. embedded in clothing). Wearable technology is a key story, like “Ringly”; jeweled rings that can be paired with your smartphone to vibrate and ring when a message is received.

Chobani SoHo – an artfully designed café showcasing Chobani’s signature category-creating Greek yogurt in both savory and sweet “creations”, along with coffee and sandwiches. It’s as much about the philosophy and aesthetic of Chobani as it is about the yogurt itself.

In each of these cases, the stores are unashamed showrooms, allowing shoppers to interact with and experience the brands on a deep and meaningful level, then (hopefully) spread the word via social media. It’s about buying into the brand, not necessarily purchasing from that outlet.

In regular retail too, forward-thinking merchants are happy to treat their stores as showrooms. Apple led the way. From when the very first Apple Store opened in 2001, the retail space was a glistening showroom of all things Apple, where customers were encouraged to play with no pressure to purchase. (Of course, it helped that Apple is famously rigid with pricing no matter the vendor, and that they own the brand.) UK department store John Lewis has also significantly built its business on being agnostic about where the sale ends up – in store or online. They are more than happy for shoppers to be inspired in store and then buy on their devices. Do a good enough job in the store, and the shopper will stick with John Lewis.

For a while, a year or two ago, retailers were penalizing shoppers for treating their stores as showrooms. There was the case in Sydney Australia of a ski shop charging customers to try on boots, then refunding if a purchase was made. Wrong move. You can’t fight the Internet and you can’t bite the hand that feeds you. Instead, it’s time to reinvent retail and embrace showrooming.

To View the Original Article: http://www.newretailblog.com/embracing-%e2%80%9cshowrooming%e2%80%9d/

Amazon: No fear of failure

By Daphne Howland | March 18, 2015                                                             


Since the mid-nineties, America’s premier e-commerce site has habitually and utterly disrupted retail. But recently retailers have hit back, with more nimble e-commerce sites of their own, price matches, and delivery options that continue to rival whatever Amazon comes up with.

And while other retailers created and improved their omni-channel strategies, Amazon overplayed its hand and launched an entire phone when a mobile app may have been the better trick.

But Amazon’s willingness to try and fail may ultimately be the key to its continued success. Retail Dive looks at the challenges Amazon faces these days.

 

Showrooming goes in reverse

There was a time when retailers large and small were crumpled by shoppers showrooming—where they would check out the goods they wanted in stores and buy from Amazon at significant discounts. But retailers of all sizes have learned to match prices, provide added advantages to being in store, or both, and now consumers are just as likely to reverse the process: search for things online and head to the store to get it immediately, a process now known as “webrooming.”

That has helped spark a dizzying array of delivery options from retailers—of all speeds and conveniences. Cheap or free shipping with increasingly lower minimums, same-day delivery, and pick-up in-store.

“While showrooming is centered on price, 'reverse showrooming' is all about discovery,” writes Jeff Fagel, CMO of G/O Digital, in Entrepreneur magazine. “Therein lies the real opportunity. As our research found, 30% of holiday shoppers said they always use their desktop/laptop computers to research on-sale items before heading to stores. If that stat isn’t convincing enough, another 25% said they go online to ‘compare products and prices between retail stores’ before making their way to stores.”

 

Prices don’t matter so much anymore

These days, consumers are in the driver’s seat, demanding good value from retailers of all kinds, not just Amazon. For one thing, they’re wising up to the fact that Amazon doesn't necessarily present the best way to shop, and its prices aren’t always the lowest any more either.

Larger retailers like Target, Wal-Mart Stores, and Best Buy have risen to the challenge and have done a good job of matching Amazon’s once-always lower prices.

And retailers like local booksellers, which can’t meet Amazon’s cut rates, have found other ways to please customers with services and loyalty programs that require in-person relationships.

"There is this larger, cultural shift ... to buy local,” Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance, told CNN. "Rather than pulling back and buying into the idea that they could save a few bucks elsewhere, in many communities, people seemed to make even more of an effort to steer their spending to businesses owned locally.”

 

E-commerce is still being disrupted

And not always by Amazon. In addition to pricing, delivery, pick-up, and return options offered by many retailers, soon-to-launch Jet will be introducing even newer ways for consumers to save money.

Amazon initially freaked out retail by undercutting on price, then disrupted itself (and everyone else) further by offering ways to get free shipping. But Jet, much like bulk e-commerce site Boxed, is adding layers of disruption by providing more variables and choices to consumers. Also like Boxed, Jet plans include nimble mobile commerce, Jet CRO Scott Hilton told Retail Dive.

The site will work with retailers’ inventories to locate items a shopper wants and provide options. The item, price, speed, basket size, and basket mix are all variables that may be under a shopper’s control, and Jet shows the potential savings.

“We have a unique tech angle—live dynamic pricing and repricing,” Hilton says. “There are options that steer shoppers to more economically efficient orders. Jet members will be able to pay more to speed up shipping or waive the right to return to save money.”

Jet will be based on a membership model. At $49 a year, it’s way below Amazon’s $99 Prime membership and will be Jet’s only source of profit.

Of course, Amazon’s Prime membership is a formidable thing: Amazon Prime members spend $1,500 each year, more than double the $625 non-Prime members spend. Amazon doesn’t release its figures on Prime membership, but Consumer Intelligence Research Partners, LLC (CIRP) in January estimated that the retailer has some 40 million Prime members, bulked up in part by free trial offers over the holidays.

And Prime members enjoy a raft of extra privileges that greatly boost Amazon’s value to them, including access to the company’s streaming entertainment and music services and access to its Kindle lending library at no extra charge.

 

Is pure-play e-commerce doomed?

New York University marketing professor Scott Galloway makes a strong case that pure-play retailers, whether just brick-and-mortar or just e-commerce, are doomed. He includes Amazon, whose approach he dubs a "last-man strategy," meaning that Amazon is waiting for its competitors to struggle under the challenges it presents to retail (free shipping, fast shipping, one-click orders, low prices) until they essentially cry "Uncle."

Galloway says that retailers (and delivery services like Uber) are successfully taking on that challenge, though, and that Amazon will stumble as stores beef up their e-commerce and especially their fulfillment options.

Others don't buy that, saying that Amazon is in many ways as special as Jeff Bezos seems to think it is.

"I disagree," writes Oracle's David Dorf in his Commerce Anywhere blog of Galloway's assertions. "Not because the logic is flawed, but rather because Amazon is not a typical retailer. I believe they could be profitable if they wanted to but instead choose to continue investing in widening their competitive moat. Not only is their retail business state-of-the-art, but their investments in AWS, tablets, payments, IoT, etc. are complementary, and help to diversify the business (yes, they can do both). Amazon is not your typical pure-play."

 

The phone, the drones

In addition to greatly increased competition from various directions, Amazon has launched a few high-profile shots that have so far failed to materialize or even outright bombed. Its drone program, for example, has something of a dubious future, considering regulations released in February by the Federal Aviation Administration that would bar the drones Amazon envisioned for its “Prime Air” program.

But perhaps Amazon’s most conspicuous failure is the Fire phone, a pricey device that had little appeal, is expensive, and may have been able to accomplish its aims with a well-designed app.

 

No fear of failure

The thing is, none of this likely matters in the long run for Amazon, for the simple reason that failure is baked into its approach to success.

“What really matters is, companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence,” founder-CEO Bezos told Business Insider late last year.

“Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail," he says. "I don’t believe in bet-the-company bets. That’s when you’re desperate. That’s the last thing you can do.”

To view the original article please visit: http://www.retaildive.com/news/amazon-no-fear-of-failure/374996/

The new shopping behavior that is creating big challenges for the retail industry

Shoppers browse merchandise at an Old Navy store in San Francisco.(David Paul Morris/Bloomberg)

By Sarah Halzack February 11

Think back to December, when you were in the thick of your Christmas shopping.  How did you pick out that perfect scarf you put under the Christmas tree for your sister?  How did you know you got a good price on those Beats by Dre headphones for your nephew?

If you’re like most shoppers, the answer is likely that you did plenty of research before opening your wallet.

The Web has made it easier than ever for consumers to make price comparisons and to access product reviews, and that has meant that today’s shoppers are frequently armed with reams of research by the time they pull the trigger on a purchase.  And they’re not making impulse buys like they were in the days before the recession.

This dynamic is creating major challenges for retailers, who must now figure out how to thrive in an era when the consumer is ultra-knowledgeable–in many cases, more knowledgeable than the store’s own sales staff.

A new study of U.S. consumers, conducted by professional services firm PricewaterhouseCoopers, shows just how prolific this shopping behavior is becoming.

In its annual shopping survey, PwC asked shoppers how likely they are to conduct research before making specific types of purchases, including everything from jewelry to toys to clothes.   As you can see in the chart below, the share of shoppers who did not conduct research was already fairly small in every category back in 2013.  But more striking is how much the figure decreased in every category in 2014.  In each case, significantly fewer shoppers are not researching before they buy.

Chart Courtesy of PriceWaterhouseCoopers.

This may not seem especially surprising if you remember the “showrooming” panic that became a fixation for brick-and-mortar retailers several years ago.  Back then, they were worried that shoppers were coming into their stores to try on or test out merchandise, only to go home and purchase them online from Amazon.com or another e-commerce competitor.

But that perceived threat hasn’t quite materialized the way many retailers expected.  In fact, the PwC survey, along with many other recent research studies,  suggests that “showrooming” is far less common than its opposite, a practice the industry has dubbed “Webrooming,” in which people browse online before ultimately going to a store to make a purchase.

Chart courtesy of PricewaterhouseCoopers.

So here is the gauntlet that consumers have thrown down for retailers:  They continue to want to shop in physical stores in large numbers–for now, only about 7 percent of purchases in the U.S. are made online.

But by the time they get to the store, shoppers already know exactly what they want, and they want to get in and out of the store quickly.  And this attitude makes it extremely hard for retailers to upsell them on a fancier kitchen mixer or persuade them of the merits of buying a protective case for their smartphone.  And it makes it hard for them to provide outstanding customer service, since store clerks now have to assist shoppers who might are already be experts on what they’re buying.

The silver lining in this data for traditional retailers is that it makes clear that stores are hardly becoming an obsolete part of the shopping process.  In many of the categories above, including grocery, sports equipment and even consumer electronics, more than half of consumers want to visit a store at some point in their path to purchase.  And so even in the digital era, those expensive store leases are still playing a critical role in driving sales.

To view the original article please visit: The Washington Post
 

Combating Internet Pricing - A Survival Guide

Many retailers today worry about the effect of the internet on their brick-and-mortar business.  Many feel that customers will buy from the internet long before they buy from the store, mostly because of pricing and convenience.  This has been made worse by the practice of “showrooming” which happens when customers come to the store, look at a product they want, note the UPC or vendor’s style number, and then go online and find it for less than what you offer.

In fact, one of the larger online retailers who shall remain nameless became famous last year for offering a 5 percent discount to customers if they went into a local store, scanned the UPC code and bought the product online.  That was a brutally competitive move.

So how do you survive while such tactics are practiced?  What makes customers willing to buy in your store instead of buying online?  Here are some tips that we have seen work, from retail stores that are successfully beating the online merchants.

Shopping is STILL fun!  Through all the years that I have been in retail, the death of the brick-and-mortar store has been announced several times.  I remember when the catalogue business grew substantially, and there was great concern that no one would go to the stores anymore.  That has never happened, and even though it can be great to shop online, it will never compete with the social   Customers still love to go to the store, to feel the merchandise, to interact with friends and store associates, and enjoy the entire experience.  You don’t get that when you are all alone in your room.  So the first thing I would recommend is to make sure that your store is a fun place to shop.  Remember, when you open the doors, it’s “retail theater” and the party should be going on right then.  The more fun it is to visit your store, the more the customer relates to and has a great experience with your staff, the more they will visit and the more they will buy.  Keep it fun by having lots of great events, cool contests, and make your store the ‘place to be.’ 
interaction and fun of shopping at a retail store.

On top of that, make sure your sales people are offering incredible customer service.  Make sure they understand the basics of selling, of caring for and offering help to your customers.  The better the customer service, the more likely the customer will feel compelled to buy from you, right there on the spot, rather than waiting for an internet company to ship them.

Better Merchandising  Along the same lines, one of the things that helps defeat showrooming is to have great merchandising that makes the product even more desirable.  If your merchandising shows the product well, you can create instant demand for it.  And the best part about instant demand is that customers want that product now, not 2-4 weeks from now.  Entice your customers with great displays that show off the product, show how it is used, how much fun it is to have, and your customer is more likely to buy it right then and there.

The Best of The Best  Remember, one of the reasons that people go to boutiques (on top of great service) is that those boutiques have scoured the market to find the best of the best.  Sure, if you know the brand you like, you can go to their website and buy there, but what if you want to mix and match brands (to get the best of the best) and you need to know how to combine products from different brands for one solution?  For example, as you put together the nursery, you may find a changing table from Vendor A, that works really great with shelving units from Vendor B, but the bedding from Vendors C and D.  That’s hard to do on the internet.

Prepare your argument  The main advantage that brick-and-mortar retailers have over online merchants is that the product is right there, right now.  It can be a gamble to buy the product online because it could be backordered, or they could ship incorrectly.  Dealing with returns with online merchants can be a major hassle.  So when you find someone who is in your store and they appear to be showrooming, we suggest you play offense, not defense.  Tell them the above two things, but also remind them that you are a local merchant, adding dollars to their local economy, hiring local people, and the best thing they can do for themselves and their local economy is to support local business.   At the same time, you can put the product in their hands and tell them “You can have this right now, right this second, or you can go home and order it and have it a few weeks from now.  Which is better?”  We have seen this work very effectively.  As such, it would be worthwhile to spend a little time on this topic at your next staff meeting (you do have staff meetings, right?).  Talk about these strategies and get your staff ready to combat showrooming with better service, better merchandising, and better selling.

Promote Like Crazy!  One more thing that will help defeat lowball internet pricing is to make sure that you are actively promoting your store.  This means broadcasting your message on all the important channels - Facebook, Pinterest, Instagram, Twitter, etc. - and in those posts you should be showing how relevant and important your store is.  Talk about how you are watching the latest trends, how you are bringing in the most relevant merchandise, how you are ensuring that your customers always have the best of the best.  Remember, nowadays with the massive explosion of online outlets for promotion, your biggest challenge is mindshare.  You want to make sure your customers think about you when you talk about the products that you sell.  The more you can outflow (including email and all the websites mentioned above), the more likely people will think of you and your store, and come in when they need those items.

Sure, lower prices online can be difficult to overcome.  Still, the internet is not that different from any other store that offers low pricing.  Somehow though, since it’s the internet (which has the apparency of being “huge”), retailers seem to think it is harder to compete against this segment.  The truth is that if you apply the basics to your business, control your inventory well, and utilize the above strategies as best you can, you’ll keep the register ringing.

About the Author:

Dan Jablons, President of Retail Smart Guys worked in retail while attending the Ohio State University, where he graduated with a B.S. in marketing and production. He has worked with retailers such as Walmart, Target, JC Penney, American Apparel, Betsey Johnson, Donna Karan, Jimmy Choo, Charles David, Diesel, Oakley, Tumi, Hollywood Bowl, and many others. As a consultant for Retail Smart Guys, Dan brings many years of retail experience to stores of any size to improve their operations, revitalize their marketing, and maximize their profits.  For more information, email Dan at dan@retailsmartguys.com or call 818-720-2585.

Retail Party July 2012: Independent Retailers Battle Showrooming

On July 20th at 11:30am retail industry experts gathered for our monthly "Twitter Party" hosted by One Step Retail Solutions. The theme of the month was indepedent retailing in honor of Independent Retailer month (July). Active contributors included Retail Smart Guys, King Retail Solutions, Independent Retail USA and Smart Retail. This discussion was on the topic of showrooming and indie retail versus internet giants as suggested by Dan Jablons of Retail Smart Guys.

Independent retailers competition for sales against internet giants is exacerbated by "*showrooming" which effectively puts independent retailers resources to work for the likes of Amazon.

The general observation is that this is very much an ongoing issue for independent retailers and attendees offered several tips to counteract show rooming, key being strategic merchandising and top-notch customer service. Other suggestions are educating your sales staff on the benefits of shopping locally so that they can in turn educate your shoppers and have way to address showrooming.
Benefits of buying local include feeding into your own communities economy and avoid unnecessary pollutants through excess shipping and transport of goods.

An additional resource is opening up your very own eCommerce site, made possible by top of the line Point of Sale systems.
a) Making your products easily viewable by your customers at all hours, everyday.
b) Make it so that your buyers can make a purchase at any hour, everyday. Pick-up in store may be a good arrangement.

Here are some of the most memorable Tweets.
@danjab Another point: retailers should not try to compete on price. You never win that battle! Hold price, provide great service!
@IndieRetailUSA Shopping local helps biz owners who are passionate about making a difference. They're the first to give back to their community.
@danjab Benefits to buying locally: Esp in fashion, you need people who can help you look great by choosing the best items for you.
@kingretail Mom & Pop Stores account for >1/2 of US retailers! Great service in store is always memorable!

@danjab Make sure your staff has COMPLETE product knowledge. Customers will buy if they are educated.

@kingretail we just did a survey (results not yet announced) but basically yes, Americans love local grocers, boutiques, etc.

@danjab Indie retail defeats price by providing better value & service & being FIRST with new fashion & product. Trumps price every time

To follow any of these active Twitter accounts:
@danjab Dan Jablons of Retail Smart Guys
@kingretail King Retail Solutions
@indieretailUSA for Independent Retail USA
@smartretail for Smart Retail


To attend our August Retail Twitter Party go to http://twebevent.com/RetailParty, with the look and feel of a chat room it is easy to discuss concepts amongst your peers and retail industry specialists.

August 17th at 11am PST - Discussion of Visual Merchandising and Retail Design


*showrooming, where a buyer checks out a product in store to ensure quality or value and then purchases on-line for better price. Your retail store acts as a showroom for e-giants.