Here in Corvallis, Oregon a local camera shop is closing their doors after 47 years. The Gazette Times, our local paper, published a well written article where the owner attributing “showrooming” as one of the key factors for the business downturn and liquidation.
For those of you unfamiliar with the term, Wikipedia defines showrooming as when a customer visits a brick and mortar retail location to touch and feel a product and then goes online or to a low-service big-box retailer to purchase the product at a lower price. Hey, it exists and its only going to become more prevalent unless local businesses learn how to compete.
Edgell Networks did a survey on showrooming and the results were pretty interesting.
“80% of the retailers surveyed by Edgell Network and eBay Local said they expect their sales to be negatively impacted by an average of 5% because of showrooming. Even worse is that 49% say they are not prepared, with only 12% saying they have a strategy.”
So here are my thoughts, how can you know something is going to happen and not be prepared and not have a strategy in place to combat the issue? I used to help small businesses prepare when a Big-Box store was opening in their area. Those that planned, prepared and had a strategy in place survived, those that didn’t went the way of the dinosaur. So if you have a small business that is vulnerable to showrooming, I’d suggest you get started planning and preparing. If you don’t have a business strategy, get one or find someone that can help you put one together.
I read the Edgell Network study and it pointed out some interesting observations. It also lead me to a recent Forbes article which you can reference below and to a Deloitte report on holiday shopping. One interesting statement caught my eye.
“”Retailers that welcome the smartphone shopper in their stores with mobile applications and wi-fi access — rather than fear the showrooming effect — can be better positioned to accelerate their in-store sales this holiday season. Recent research from Deloitte indicates that shoppers armed with smartphones are 14 percent more likely to make a purchase in the store than those who do not use a smartphone as part of their in-store journey.”
This isn’t rocket science, people are busy. If they are in your store and you provide them competent service, answer their questions accurately and give value that is meaningful; you can convert many show-roomers (I just made that word up I think) to customers. If you only compete on price, you will lose.
Provide service beyond compare. Engage your customers both present and future. Create a community using social media platforms. Leverage new technology to make your business look cool. While price is still king, think about offering specials that the on-line businesses can’t compete with like hands-on training or a special loyalty program that’s meaningful. Have on-line reviews handy so you can discuss the pros and cons with the customer. Lots of reviews have terminology that your customer might not even understand. So what if the reviews are from a competitor, information is king.
I’ll tell you what you don’t do. You don’t look at people that are trying to save money as the enemy. You don’t treat them with disdain. You don’t make them feel guilty and you don’t blame them for your lack of having a business strategy to help them make an informed buying decision from you.
Corvallis Camera didn’t have any social presence (Facebook, etc.) nor seemed to engage their photo community with a timely news blog. I don’t know if they had a loyalty program or not and I don’t know if any of this would have made a difference for them given other business factors but it might for you. Showrooming is here to stay just like the big-box stores are as well. Imploring people to “shop local just because” isn’t a plan nor is it a sound business strategy.
Good luck this holiday season and be nice to your potential customers. As a local business you have a lot to offer, make sure they know just what that is that makes you worth buying from.