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Showrooming Rewrites Retail Rulebook


Retailers have two realities to deal with this holiday season. Showrooming will put them out of business – and their customers don’t care if retailers go out of business. How’s that for tough love?

Showrooming – the consumer practice of checking out a product in one store and buying it elsewhere at a better price – has always been a challenge in retail.

But smartphones have changed the game significantly and showrooming has gone from being an annoyance for bricks and mortar retailers to a serious threat to their survival.

A survey of 2,361 adults shopping between September 18 – 20, found that 43% of smartphone and tablet owners have engaged in showrooming.

Of the shoppers who have showroomed, nearly all have sometimes or often bought a showroomed item online for a lower price later on. The survey found that 28% of respondents said they did this often, while 68% said they do it sometimes.

Here’s where retailers need to pay attention. Forty-four percent said they were “not at all” concerned that showrooming may drive brick-and-mortar retailers out of business, while 41% said they were somewhat concerned, and 15% said they were very or extremely concerned.

This dire news for retailers was both predictable and preventable. What have retailers done to shoot themselves in the foot?

  1. Everything is on sale – Inflated margins to support false sale prices have overstated retail price points. No one buys the product at full price because the product will likely be on “sale” next week. SOLUTION: Price product fairly.
  2. Everything is the same everywhere – With little differentiation between brands and products the only point of differentiation becomes price. SOLUTION: Add own-brand product into the mix.
  3. Sales staff aren’t selling – Employees on the sales floor should be engaging customers, asking questions, solving problems, selling! – not be restocking inventory. SOLUTION: Spend an hour in Nordstrom.
  4. Technology is clobbering bricks and mortar – When customers can buy from another retailer online while in your store and save money they will do it. Who can blame them? SOLUTION: Repurpose your technologies like bridal registry to other areas of the store.

Business is tough enough in a difficult economy. Retailers who want to survive need to rewrite their rule book. Repeating what worked last year doesn’t cut it anymore. Change or disappear. It’s that simple.

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