Social Media and Showrooming: Tips for Retailers
Dr. Gary Edwards
In today’s retail environment, consumers leverage a wide range of technologies to connect with brands and provide feedback on in-store shopping experiences. Although physical retail continues to be relevant, technology is changing the way consumers interact with brick-and-mortar retailers.Social media and mobile devices are the driving forces behind the new retail frontier. Armed with a smartphone and a Facebook account, the average in-store consumer can quickly access product reviews and personal recommendations for nearly any item on the shelf. In a practice known as “showrooming,” customers use in-store opportunities to interact with products, which they then purchase online from another retailer—sometimes before they leave the store.
Physical store retailers need to become better informed about how their customers are using these new technologies, and then devise strategies that leverage social media and other consumer-friendly technologies to improve in-store experiences.
The Showrooming Threat in Traditional Retail
Whether brick-and-mortar retailers realize it or not, consumers are “showrooming” in record numbers and it is moving well beyond early adopters. According to a recent Empathica Consumer Insights Panel, price checks are the most frequent in-store mobile activity: 55 percent of smartphone owners have performed an online price comparison during a brick-and-mortar shopping excursion. In addition, over half of consumers with smartphones have looked for reviews about a retailer during an in-store visit.
Online-only retailers are well aware of the fact that consumers use physical stores to interact with merchandise that they later purchase online. Earlier this year, Target stopped carrying Amazon Kindles in retaliation against the online retailer’s efforts to encourage showrooming in Target stores.
Although showrooming is clearly irksome for brick-and-mortar retailers, the real danger is that the practice radically commoditizes the retail space, reducing the buying process to a price war in which online retailers always have the upper hand given their lower cost base. To combat showrooming and other threats, physical stores need to leverage technology in a manner that highlights their competitive advantages.
Strategies for Brick-and-Mortar Retailers
Showrooming is based on an inherent advantage that brick-and-mortar retailers have over their online counterparts: the potential to generate exceptional and well-rounded customer experiences. While Internet sellers compete on price and convenience, physical store retailers have the ability to create truly seamless experiences that add value to their products through a careful combination of product, environment and service.
For example, leading retailers are already using proprietary apps, third-party apps and mobile-optimized websites that encourage in-store interactions with brand websites. Brick-and-mortar retailers are also leveraging other tactics like push notifications, QR codes and special promotions to create value in the physical store space. The ability to order online and enjoy an expedited in-store pick up process is becoming a popular buying option because it combines online and offline elements to deliver a “best of both worlds” experience to consumers.
Social media has an important role to play in brick-and-mortar shopping experiences since the intersection of social and mobile technologies is a critical nexus for consumers. Consumer Insights Panel research shows that 82 percent of consumers are willing to engage retail brands in online conversations if they believe it will improve future experiences. By providing ways for in-store mobile users to engage in transparent, social conversations with the brand, retailers can add value to the customer experience and promote brand loyalty for subsequent purchases.
There are many ways that social media can be combined with other strategies (e.g. special in-store promotions, social sharing, knowledgeable floor staff, etc.) to combat showrooming. The key for retailers is to consider how social channels can be leveraged to forge deeper connections between consumers and the in-store shopping experience.
Gary Edwards is Chief Customer Officer of Empathica. He is responsible for oversight of sales, marketing, client strategy, marketing science and retail insights. Gary has served a key leadership role during program development, implementation, and follow-up with clients for the past eight years at Empathica. His prior experience includes serving as a Senior Vice President at Maritz: Thompson Lightstone and an account executive in the then newly formed Financial Services Research Group.