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Showrooming

July 7, 2012
Showrooming: Using a smart phone while in a brick and mortar retail showroom to comparison shop for a better price than the retailer’s.

All of us have seen it - - - a consumer typing into their smart phone while standing next to a set of furniture. Are they texting their mate to see if they approve? Maybe they are looking up the manufacturer’s web site to get more information. Or, are they trying to beat your price?

Let’s see what Pew Research had to say about this in a survey they conducted during the 2011 holiday season. Well, 38% of consumers used their phone to call a friend to get advice about the item they were considering for purchase. 24% used their smart phone to look up reviews of the product while they were in the store. 25% used their smart phone to comparison shop.

Of the 25% who looked up competitive prices, 35% purchased the product from that showroom, 19% purchased the product on-line, and 8% purchased the product from another store. This is a mixed bag of results. The bright side is, if your customer uses their smart phone to comparison shop (25% do that), the chances are good that they  will purchase the item(s) from you. On the other hand, the survey shows that over 27%  of the people who use their smart phones to comparison shop while in your store will make their purchase elsewhere.

To put that into real numbers, out of every one hundred customers who come into your store, 25 will use their smart phone to comparison shop. Of that 25, approximately 9 will buy from you and 7 won’t. That’s means 7% of all of the people who come into your store will look around for just the right furniture, use your sales consultants’ time, look at swatch books, sit in a chair to see if it is comfortable, look at the construction, and then will order the same item on-line or from your competitors. Don’t you just hate that?

I am not sure there is any one right way to take advantage of this trend and get back those 7 sales. However, I do have some suggestions. Our best defense has to be a sales staff with considerable product knowledge. If my sales staff doesn’t know what a circumferential weld is, can’t explain the difference between tubular or extruded aluminum, or doesn’t know the warranty terms for a manufacturer, my consumer might fire up their smart phone to get that information.  Remember 27% of the consumers who use their smart phone in your showroom are going to purchase elsewhere; so, we don’t want to give them any reason to put that phone to their ear. A knowledgeable sales person has enough information that the consumer shouldn’t even have to turn their smartphone on!

Next, if we know a consumer is interested in getting a product review from the Internet, let’s preempt them by doing it for them and in the process get closer to a sale. Have your sales staff do a web search of “product reviews [insert manufacturer name here].” Then compile the best and the worst reviews and bookmark them. When a customer gets serious about purchasing a particular item, the sales assistant can then show them both good and bad reviews on their iPad or close-by computer. You may be wondering why I suggest you show the worst reviews, too. The best defense is a good offense. If you have prior knowledge of the bad things being said about a product, you can prepare an intelligent response explaining why that review may or may not be appropriate for your customer.

Finally, when my sales consultants have done a good job, most consumers will end up buying from us. Still, many consumers want to be assured they are getting a good, if not best, price. They will comparison shop on their smart phones no matter how good the sales person has been. Here is where a really good sales person shines. When a consumer finds a better price, the good sales consultant will get them to share the web site address with them by telling the shopper they want to see if they can meet the competition’s price. Then, they will be sure the consumer is comparing apples to apples by finding out if the competitive price includes shipping, assistance with goods that are received damaged, setup, assistance with warranty issues, and returns. If it doesn’t, these are areas the sales consultant emphasize to show our competitive advantage.

When I first saw customers “showrooming,” it annoyed me. However, after reading the Pew Research survey, I realized a consumer who is “showrooming” is sending out cues that they want to buy. If they weren’t, why would they be asking friends for input, looking at reviews, and trying to find competitive prices? This is a customer primed to make a purchase. By reading the survey, I now understand why the customer pulls out their smart phone. It is just a matter of using that information to help close, rather than lose, a sale.

Yours in confused retailing, Bruce