Showrooming versus webrooming… and what you can do about it
Gone are the days when the retail experience was as simple as putting a ‘sale’ sign on your storefront, creating a compelling window display, and hoping customers dropped in and spent up.
Today, retail is multi-faceted and complex. Customers shop both in store and online, and from all kinds of devices and places. If your local outlet can’t fulfil a customer’s needs, chances are there are plenty of global suppliers who can – potentially for a lower cost. Thanks to digital technology and the availability of data, customers also expect very personalised, informed retail experiences – and are prepared to shop around until they get them.
That said, physical stores certainly aren’t going anywhere. Bain & Company state that 75% of sales will still occur in a physical location by 2025.
In this multi-dimensional context, it’s not surprising that there’s an increase in the amount of “showrooming” and “webrooming”, where customers flit across channels throughout the purchase cycle.
What is “showrooming” and “webrooming”?
Essentially, showrooming is where a customer visits an actual store – or showroom – to experience a product in person, then purchase it online. Conversely, webrooming is where a customer browses and researches a product thoroughly online, then makes the purchase in store.
This image (courtesy of Merchant Warehouse) explains it nicely:
According to Merchant Warehouse, webrooming is slightly more popular – with 69% of polled customers between 18 and 36 admitting to webrooming, but just 50% admitting to showrooming.
What do these trends mean for your retail business?
The fact that customers are potentially interacting with your brand via multiple channels and devices represents an opportunity to respond with a seamless, omni-channel experience.
To combat – and embrace – the rise of both showrooming and webrooming, retailers can:
- Offer incentives to close the loop. By capturing and using data to determine when a customer is crossing channels throughout the purchase cycle, you can offer specific incentives to encourage them to complete their purchase with you. For instance, you can offer a personalised discount or incentive to a customer who researches a product in your store, but who then wants to purchase online.
- Be flexible with delivery. When it comes to completing a purchase online, delivery can often be an obstacle – particularly if there is a significant fee attached, or potentially, a delay. To combat this, retailers can offer customers the opportunity to pick up an item in-store once it has arrived from the warehouse.
- Be flexible with returns. With retailers such as Amazon Australia now offering free returns (for products fulfilled directly by Amazon), traditional retailers have an opportunity to combat this with things such as “buy online, return in store” terms.
- Be consistent. Today, customers expect to receive the same experience regardless of where they are shopping – either in store, or online. As such, it’s important that the products you’re offering, and your pricing, is consistent – increasing the likelihood a customer can close the purchase cycle with you. Read more about optimising the omni-channel experience here.
- Embrace predictive analytics. A recent Gartner study found that 50% of all customer interactions will be influenced by real-time analytics by 2018. Predictive analytics is about predicting a customer’s future shopping behaviour – and whether they will buy online or in-store – by using a combination of data mining, statistics, modelling, machine learning and artificial intelligence. For instance, if a customer has purchased an item online, predictive analytics can help you determine the likelihood of that customer buying again, based on their individual buying patterns. It can also help you determine the best time, and method, to contact the customer to optimise the likelihood of a repeat sale.
Read more about the trends in retail in our whitepaper – Thriving in the Amazon era