Picture this: A customer—let’s call him James—pulls out a smartphone and snaps a photo of one of the engagement rings in your showcase. Then he starts tapping the keys on his device.
What’s happening? James is showrooming: examining merchandise in a brick-and-mortar store, then using a smartphone to find the best price for the same style on the Web. He’ll walk away and order it online, making clear that he’s used your store, with its expensive overhead and security costs, as a convenient way to try the ring on for size (so to speak).
Customers like James are on the rise. “With today’s technology, everyone has a smartphone on their hip,” says Jenny O. Calleri, brand ambassador for T-Bird Jewels in Las Vegas. Those smartphones are turning into powerful shopping companions.
Showrooming, like technology in general, is breaking down the walls that have long blocked public access to pricing. “Price is transparent today,” says James E. Dion, president of Chicago-based retail consulting firm Dionco Inc. “And showrooming is the end result of price transparency.”
While just about anyone can showroom, recent surveys from Forrester Research in Cambridge, Mass., and Indianapolis marketing firm Aprimo reveal an enthusiastic demographic profile: males between the ages of 18 and 34. Some 64 percent of that group, who own smartphones and who recently shopped in retail stores, say that they have showroomed. Of the general population with the same characteristics, 52 percent report participating in the activity.
What do showroomers want? The best price, not a better selection, according to a survey from e-commerce software vendor Fluid Retail. Three out of four showrooming purchases are driven by cost savings. This sharp eye for the best deal seems to be endemic everywhere: During the past year, reports global marketing firm Parago, 70 percent of shoppers report looking at price tags more carefully than ever.
Showroomers often snap pics—all the better to comparison-shop with!
The public’s love for showrooming shows no signs of fading away. Indeed, 47 percent of respondents in the Forrester-Aprimo survey plan to do more online price comparisons while shopping in brick-and-mortar stores. “This is alarming in an environment where there is price competitiveness,” says Sucharita Mulpuru, principal analyst at Forrester.
Showroomers can be hard to distinguish from enthusiastic customers who just want to snap pictures to show their friends. But the former often give themselves away. “They drop hints,” says Richard Kern, owner of Churchill Jewelers in Santa Barbara, Calif. “They may start asking questions like, ‘Is this 14 karat or 18 karat?’ It’s clear they have done some homework.”
What should a jeweler do about showroomers? Banning in-store photography can irritate your regular customers—many of whom want to search the Web for information about, and reviews on, merchandise they are considering.
Furthermore, people might think you have something to hide. “If you say, ‘Don’t take a picture,’ the customer may ask, ‘Why? Are you afraid to let me comparison shop?’?” says Steve Hug, president of Hug Jewelers in Cincinnati. “I would rather customers go ahead and compare prices, then decide to buy from us because they like our prices and service.”
Retail consultants applaud this approach. Patrick C. Fitzpatrick, president and founder of Atlanta Retail Consulting in Alpharetta, Ga., says that tolerating or encouraging in-store photography can communicate a commitment to price parity and the conviction that your store is a great place to shop. “It’s smart to promote that you welcome showrooming,” he says. “Don’t try to hide the practice. Put it out on the table. Let people know how much you want their business.”
Indeed, why not turn the showrooming adversary into an advocate? Fifty-eight percent of showroomers haunt online forums more than once per day, reports IBM Global Services. More than half of them, according to the consulting firm’s survey, write favorable reviews. Yours can be one of them.
Lux Bond & Green
While all the retailers JCK interviewed for this article agree that showrooming should be allowed, they also concur that a liberal price-shopping policy must be matched with an effective sales initiative. “We would certainly welcome the challenge,” says Nancy Haas, manager at Lux Bond & Green in Wellesley, Mass. “We would see it as an opportunity to point out the positives of buying from a 115-year-old brick-and-mortar store.”
The many advantages of dealing with authorized brick-and-mortar retailers include guarantees of authenticity, warranties, and support for damaged merchandise. Communicating such benefits is part of effective selling.
Retailers also must help customers understand the reasons behind price variances. “Maybe a client finds a basic anniversary band selling for $1,000 on a website versus $4,000 in our store,” says Calleri. “I can still make the sale by helping the customer understand the difference in price. It may come down to factors such as the quality of the diamond, how it is cut, the crystal structure, and, most important, how the piece is manufactured. In addition, our store can offer value in terms of policies such as trade-in programs and lifetime warranties.”
Brick-and-mortar retailers, adds Calleri, also can stay ahead of the curve by personally engaging with their customers. “People buy from people—especially people they like, trust and, most important, believe.”
She offers an example: A customer might snap a photo of a ring, stating that he wants to show the picture to his fiancée. “Maybe he is lying,” says Calleri. “But the next day I call and ask, ‘How did it go?’ I invite him back into the store. That gives me a chance to overcome his objections.”
If great selling techniques and a personal approach can save a sale for many items, a retailer needs to be more proactive when dealing with customers who have showroomed higher-priced special orders.
Calleri offers the example of a client who needs a special fit, perhaps for a small finger, and so cannot buy a stock item out of the showcase. If the client is familiar with the brand and leaves the store without buying, Calleri immediately calls the designer with details about the special order. The designer then asks callers who request a quote on an order with those details to go back to the initial retailer.
Calleri took just such an approach recently with a $20,000 combination sale of an engagement ring and wedding band and says many designers will cooperate with this approach. “They try to promote price consistency and protect their brands,” says Calleri.
If showrooming is becoming a dominant force in retailing, the practice also highlights the value of a brick-and-mortar store: Without it, after all, a showroomer would have no place to showroom. “In a few years, maybe 14 percent of all sales will be mobile,” says Dion. “But that means 86 percent will still be brick and mortar.”
Indeed, the value of a brick-and-mortar store is not lost on many shoppers who have started to engage in a practice called reverse showrooming—finding merchandise online, then traveling to a physical store to buy. This is happening quite a bit at Lux Bond & Green. “Sometimes people even come to us thinking that they pulled a photo off our site, but it was actually from another retailer,” says Haas. “In such cases we say, ‘That is not our item, but let us show you what we have.’ Which more often than not turns into a successful sale.”
One of the most popular sites for reverse showrooming is Pinterest, where people browse thousands of photos and pin images of items they are considering purchasing. But why would Internet-savvy shoppers bother traveling to a physical store? In addition to the reasons cited in this article, they seem to value security. “People have become more cautious as to what they buy on the Internet, especially items that are very expensive,” says jeweler Hug. “Many people have come back to us after getting ripped off online. A brick-and-mortar store has the advantage that people can touch and feel and see that quality is real. On the Internet, there is always some doubt because an item can be misrepresented.”
It’s tough under any circumstances to make a brick-and-mortar store compete successfully in the Internet age. Showroomers only make the task more difficult. Retailers who rise to the challenge will engage productively with those customers who choose to track down the best price online. “Retailers have to rethink the way they do business these days,” says Fitzpatrick. “Showrooming will only continue to grow. It’s not going away.”