A lot of bricks and mortar stores are complaining about showrooming these days. But rather than get mad at customers, they might want to look in the mirror.
Showrooming is the modern term for customers who visit a retail store to examine a product up close, then return home (or use their wireless iPad) to purchase it online. Showrooming isn’t new. Whether it was a medieval bazaar or a modern shopping mall, customers have always shopped multiple vendors of the same product, comparing prices, warranties and even estimating future service experiences should the product break down.
So why are retailers so upset about showrooming these days?
Basically, retailers are (still?) trying to blame the internet for their declines in sales. Even after two decades of e-commerce competition, many retailers have done a poor job at creating a compelling bricks-and-mortar value proposition. Now they’re vocally upset that consumers would (gasp!) visit their showrooms to check out a product but go online to save $20 or so. A few exceptions stand out: WalMart and Macy’s have made their products so cheap in-store that it’s senseless for their customers to order online and wait for delivery (even if free).
Retailers suffering from showrooming, of course, are deluding themselves: They rationalize that since customers shop on “price” and there’s no way to compete on price against virtual companies with lower overhead, the best thing to do is complain. Not pretty.
The evidence that showrooming isn’t merely about price are stores like the Apple Store, Tiffany’s and Nordstroms, all of whom have experienced strong or increased sales throughout the recession. Such companies have decided that the problem fo showrooming isn’t price at all. It’s a matter of something else.
There are lots of product categories for which waiting for it to be shipped, even if free, is dissatisfying to the consumer. Automobiles, fine jewelry, iPads, major appliances and even a Mad Men style three-piece suit are still products of instant or take-away satisfaction. But instant satisfaction alone doesn’t account for the performance of these retailers. Neither can we say that “luxury” consumers don’t quibble over $20 in savings.
So what’s the key factor?
If retailers were serious about the problem, they would start by “secret shopping” themselves. If they were honest, they would discover that the core problem: their salespeople. Most are simply terrible. For any number of reasons – indifference, poor training, skewed compensation plans (favoring warranties over a product itself), minimal product knowledge, and understaffing – consumers showroom because they hate dealing with inadequate salespeople. At some point, usually quite quickly, consumers figure out that after waiting fifteen minutes for someone to help them, that person doesn’t know how to identify their needs, explain the product’s benefits and features, and help them make a decision.
Consumers rightly decide: I’m shopping on my own in the store, so why not shop on my own online, and save a few bucks, too?
Retailers today have reduced their consumer experiences to regularly rearranging products in skewed aisles every week, turning their salespeople into glorified inventory restockers (no offense, warehouse workers). But that’s not the salesperson’s job at all. Salespeople should be first to greet the customer; first to offer a listening ear to their needs and goals; first to suggest meaningful products or services that meet those needs; and first, above all, to help the consumer make an informed decision to buy. The Apple store doesn’t create sales just because it’s laid out differently; it makes sales because it is staffed differently. Saks Fifth Avenue is arguably too huge to navigate easily in any department, but that’s not a challenge when your sales specialist knows exactly where the tie, suit or sweater that would be perfect for you is.
In other words, showrooming isn’t a discount challenge. It’s doesn’t occur because stores are out of stock. It’s not even a matter of convenience: sending back an Amazon or Zappos purchase is easy with their included shipping label, but unpleasant because you must visit the Post Office, second only in poor service to the Registry of Motor Vehicles. It’s not nearly as nice as returning the book or shoes to your local, friendly sales clerk.
Experience, not price. Service, not availability. Knowledge, not reviews. These are the hallmarks of succeeding bricks-and-mortar companies in the modern economy. Showrooming is a market signal from consumers: They tried to visit and make a purchase decision, but something went wrong, so they went back to the car to make the purchase. Well trained, knowledgable salespeople can easily overcome a $20, or $200 price differential. As much as people like a bargain, they like decision reassurance from a friendly face even more.
It’s not just retailers that must deal with showrooming, either. Service companies of every kind face the same problem. The local insurance broker who lets a walk-in customer wait at the front desk while their reps finish chatting about the weekend barbecue; The real estate agent whose idea of an open house is to let potential buyers walk through the product on their own, leaving with a piece of paper to help guide their decision. The local camera store salesperson so intent on demonstrating he knows more about f-stops than the customer, that he fails to remember he’s supposed to be making a sale.
If consumers today are leaving in-person experience where they could have instant satisfaction, in exchange for delayed gratification, it’s not for a discount. The incorrect response is to throw more discounts at customers in the store; the doubly incorrect response would be to blame the customer publicly. Taiichi Ohno, the founder of the Toyota production system once pointed out: Not every problem has a technology solution. In the case of showrooming, what’s needed is a sales people solution to help retail companies compete with a sales-person-less world of online shopping.