Showrooming Affecting Traditional Retailers

Best Buy is counting on Amy Poehler’s humor to convey its branding message when its TV commercial airs on Super Bowl night. The company is hoping Poehler’s humor will get the company’s message across. But the one thing that Best Buy wishes to accomplish for its Super Bowl ad is to fight competition from “e-tailers”, or online retailers. Best Buy is just one of the many brick and mortar stores suffering from the now prevalent practice known as “showrooming”.

Showrooming is when a person goes to a traditional store to check out the actual product he or she wishes to buy but goes online to make the purchase at a discounted price. Online stores like Amazon can slash prices because don’t have overhead costs. Traditional retailers, on the other hand, spend money on their showrooms to display the products they’re selling. But due to reduced prices online, many consumers are showrooming instead. And traditional retailers like Best Buy, WalMart, and Target are showrooming victims.

According to reports, 43% of American adults have confirmed that they have showroomed. 24% of the survey respondents said they showroomed at Best Buy, 22% at WalMart, 9% at Target, 4% at Home Depot, and 3% at Barnes & Noble.

There is, however, a small percentage who said they didn’t purchase from online retailers. Instead, they ended up going back to the store they showroomed to make the purchase. 12% of the Target showroomers went back to Target, as did the 11% of the WalMart showroomers and 8% of the Best Buy showroomers who also went back to the respective stores to make the purchase.

Still, showrooming is huge threat to traditional retailers. So it’s no longer surprising to see Best Buy intensifying its advertising campaigns to face showrooming head on. 30-second ads on Super Bowl night cost around $4 million each and Best Buy was willing to shed this amount just to combat the showrooming “nightmare”. The problem is that not all traditional retailers have the capacity to spend on pricey advertisements. So what to do? The best strategy is to think outside the box.

Target, for one, has decided to skip Super Bowl and go a different route instead – mobile game. Target has come up with a mobile app developed called “Snack Bowl”. The game can be played on iPhone, Android phones, and mobile web browsers. If the game gets a bit boring, the game’s social media element will allow players to challenge their Facebook friends. Target hopes “Snack Bowl” will build strong recall for them during Super Bowl night since people can play it on their phones while waiting through halftime.

Target has definitely gone out of the box with this approach. But what happens after Super Bowl night? Showrooming will still be prevalent then. What traditional retailers can do is to make a “buy-online-pick up-in-store” option available for customers. This must be done correctly to help improve customer service and lure customers into buying from them rather than from online retailers. Effective and versatile business phone systems are therefore needed. Pricing and promotions must also be consistent. Showroomer-to-purchaser conversion must also be increased. Completing the transaction the same day a showroomer has entered the store will prevent him or her from leaving the store and making the purchase online.

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