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Reverse engineering: How retailers should really respond to showrooming

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24th Oct 2014
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With new research demonstrating that there has been a significant increase in the traffic being driven to ecommerce sites from mobile devices, organisations cannot afford to overlook the importance of mobile in the customer’s path to purchase.

In the latest Ecommerce Quarterly report, it is revealed that mobile devices are driving 120% more traffic to etailers than a year ago.

And even though average order value on mobile remains lower than on desktop - with smartphones attributing an average of $116.48 for every purchase, compared with $180.91 for desktops – it serves as a useful reminder that brands must now understand mobile’s role in the customer journey.

“We hit an inflection point last year with mobile commerce,” suggests Bill Loller, vice president of mobile at IBM. “The mobile device is now integral to the shopping experience, whether you actually complete the transaction on the web or the phone or you go into the store and do it.”

Indeed, retailers arguably started taking the influence of mobile devices seriously with the advent of showrooming. As hysteria over showrooming has grown, retailers have gone to extreme lengths to protect themselves from what they view as a serious threat to their business. Some have placed stickers over product barcodes to discourage customers from scanning them with mobile apps, while others have begun charging visitors to browse the store.

Think again

But this isn’t the way to react, says Loller, and customers will take a dim view of your actions.

“The phone is like an extension of you – we’re all tied to these devices and so what happens to us on them is very personal,” he explains. “If it’s a good experience, we feel great. If it’s a bad experience, and if you’re trying to thwart me, then I take it very personally. And that is a very common reaction now.

Best Buy replaced the barcodes on products with their own barcodes, and that is not what customers want. When they are in the store they’re trying to research stuff. Whenever they pull out the device they want to know ‘is this right for me?’; ‘is this price too much?’; ‘are you trying to rip me off?’ If the retailer is within a reasonable band where the customer gets the information they want and can touch and feel and buy, then I think that is the experience that people are looking for.”

Indeed, battling against this trend is ultimately futile – instead, you should be finding ways to support the tasks that the customer wants to undertake.

“Don’t try to defeat showrooming – there’s no point in that,” Loller warns. “You should be enabling the person to use the mobile device in the store, instead.”

This will require a leap of faith for some but you either support the customer in what they want to do, or lose them altogether.  

Loller continues: “I’ve had conversations with retailers, and they’ve told me that they see customers come into their stores, pull out their phones, and if they don’t immediately get a wifi signal, they leave. So you should actually be offering wifi to enable the mobile experience in the store, because they are starting to become more like display rooms.

“I can’t tell you how many times I have walked into Barnes & Noble, look at all the books, decided which ones I want, and then order then off the Barnes & Noble app because I don’t want to carry them out of the store, and everybody has two-day shipping now. So these days it is really about creating a frictionless experience for the customer. People don’t have patience – when you’re holding that phone you are task-oriented, and if the company can’t enable that, and help them find what they want in the fewest clicks and browses and zooms, then they are going to lose business.”

Reverse showrooming

And leading-edge brands are already working to support the customer in this way. Big US retailers such as Walmart and Target, for instance, are already rolling out location technology such as iBeacons in their stores. This opens up intriguing possibilities for them, as they will  be able to tell that a customer is in their store and that they have the brand’s app, and they will then be able to drive them to the app while they’re in the store to make a purchase and incentivise them in some fashion.

This vision of ‘reverse showrooming’ – whereby customers browse in-store but buy online at the same retailer’s digital store – is actually what consumers are predisposed to do anyway, according to Loller, even if the scare stories have traditionally suggested otherwise.

“Research [from BI Intelligence] has shown that customers are almost twice as likely to reverse show room as actual showroom. Showrooming has been blown out of proportion a little bit. But if your prices are wildly out of sync, then yes you’re going to lose them. But then you weren’t going to get them to begin with! So at some level the showrooming thing has gotten like everybody is afraid of it but how much it is actually happening is questionable.”

All of which means that organisations need only help customers to help themselves, something that can of course be aided by adopting a more customer –centric view, rather than merely  thinking of yourself as a store trying to drive people through.

Amazon has been so successful because it doesn’t care about selling you anything in particular, says Loller, it just want to make it easy to buy what you want. And this is a mindset that more brands should be adopting.

He continues: “I think a lot of it still comes down to the idea of omnichannel – you need to create a frictionless experience across all of your channels. Especially in retail, because in many cases these are commodity goods. You can get a book anywhere! So the experience that you create around the actual browsing, researching and buying part becomes super critical because that’s your differentiator. So if you can make my life easy, if you can get me to what I want fast and it is reasonably priced and it is a great overall experience that you’ll have my business.”

And of course the mobile is now a core part of this pathway to purchase, at a variety of different steps in the journey –something that businesses should start seeing as more of an opportunity than a challenge, advises Loller.

He concludes: “Mobile gives you a chance to reset and reboot because that device is always on the customer. You have a chance to be in front of customers all the time. Think about it - when you’re on an elevator or in a queue, you pull out your phone as you have nothing else to do. Think about all that time that suddenly is available to a possible retailer or seller to get in front of you. Every time I walk into Starbucks I think ‘why aren’t they showing a coupon to me as soon as I walk into to the store’. Why aren’t they thinking of it like that? So mobile is going to radically change the game.”

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