OP/ED: Facing up to showrooming

Opinion by Robert Kramer

Smartphone-wielding shoppers avail themselves of entering a store, checking the merchandise, and comparing it to a discount online retailer, only to leave the shopkeeper used and bruised — and without the sale.

For retailers, this a frightening picture.

But Australian shoppers have always had the ability to comparison shop and to choose where to buy. Smartphones — like computers, cars, buses, telephones and the spoken word — are just another tool that people can use to inform their purchase decision and maximise the value received in exchange for their hard-earned dollar.

Similarly, smartphones present retailers with a tool to engage with shoppers so they make their purchase there and then. In order for retailers to stay ahead of the game, it’s about listening to consumers and taking it on board to meet the mobile demand.

To find out what’s going on, our research has looked at the behaviour and attitudes of 38,000 people around the world — 1,000 of them here in Australia — to understand how mobiles fit into their shopping expeditions.

We know that three in every five Australians (aged 16 to 60) ‘showroom’ in some shape or form. One in three has used their mobile to showroom. Of course — and in line with most mobile usage — it is more prevalent amongst the younger demographics. But numbers will undoubtedly grow as more people take advantage of the opportunities mobile provides in this space.

So is one in three of your store sales at risk from mobile showrooming? This will depend on the category in question. Consumer electronics and clothing are the most likely to have customers mobile showrooming — just over a quarter research via their mobile in-store for these categories. Over-the-counter (OTC) medication on the other hand is a mere one in fifty.

It’s also important to bear in mind the use of mobile devices at home for shopping and research. Two in fifty Australians research OTC medications, four in fifty look up personal care products, but nearly one in five research consumer electronics on their mobile devices at home. This makes the case of making sure that your online content is mobile friendly.

For in-store mobile showroomers, it may be tempting to assume these people are simply looking to take advantage of the retailer. When we look at what they are actually doing, we see that one in three Australians are comparing prices with other retailers here or abroad. They do this on their mobile instead of driving or heading home to ring around or surf the net to comparison shop. A retailer’s response to this could be to ensure that their pricing reflects fair market value, communicating the benefit of any price premium, or even just dropping a product that can’t be reliably sold profitably.

On the other hand, one in three shoppers are making notes for later as part of their research process. How can retailers either facilitate this information gathering (perhaps through a branded or partnered app that provides barcode scanning or adding a product to a wish list), or provide a reason to buy (now) in-store via mobile?

One in three shoppers are also checking independent product reviews — again, as part of their normal research process. The difference between this and retail experiences prior to the smartphone boom is that they do not need to go home, or to the newsagent, or to the library. They can reach out to ‘expert opinion’ right in the purchase environment to confirm a buy or no-buy decision. Apart from stocking well-reviewed products, could retailers seize an opportunity to ease access to impartial (and positive!) reviews?

Shoppers are generally trying to make sure they’re getting the right product or service at a price that they feel gives decent value. With the capability of mobile devices, they’re just doing the same things, but with fewer limitations on where and when they can do it.

The really interesting thing about shoppers and their mobile devices is how willing they are to receive help from retailers via their mobiles in-store. Well-informed sales assistants remain an indispensable part of the customer service and sales mix, but mobile offers an opportunity to have an ‘always-on’ channel to the customer.

For example, more than half of all shoppers are open to receiving mobile coupons, whether by SMS or e-mail. That translates into shoppers being willing to sign up to a Customer Relationship Management (CRM) database in exchange for letting retailers send them reasons to come back into the store. How’s that for a win-win mobile scenario?

Finally, one in two shoppers would welcome being able to access product information by scanning barcodes. All they are asking for is an easy way to find out the key information points for a given product – for example, on a retailer-branded mobile optimised product page, with perhaps a call to action.

Ultimately, consumers are just doing what consumers do. It may be uncomfortable for retailers that consumers can increasingly do their comparison shopping right in store, but by doing so they also offer an opportunity to retailers that is at least as great as the perceived threat.

Rob Kramer is a consultant at market research group TNS Global.

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