Showrooming is a bit of a new trend. Your customers, even in small towns, are standing in your store and using their smartphone to compare your price with online retailers. If the product is cheaper at the online store, they order it immediately, and you just lost a sale.
For small town retailers, this can be devastating because our costs can be higher and volume lower. In short, it’s hard to compete on price alone. Especially when our business pays for the store, provides jobs for the retail clerks, gives customers the education and information, and everything else that goes into being the show room. And then the online retailer doesn’t collect sales tax, giving them an additional price advantage (and hurting your municipal government.)
What can small town stores do about this?
My friend and fellow retailer Daniel Gordon had a reason to think about it this weekend, and our mutual friend Chad Henderson jumped in with good advice:
@dangordon give them a reason to spend money there.Be the most awesome human beings you can be.
— Chad Henderson (@elmofromok) December 15, 2012
Chad is on the right track: customers need reasons, and they need to connect with you. I added a few more ideas:
Offer them something special not available anywhere else.
Show them exclusive items, especially local items.
Talk about the local causes your business supports.
Be a real person.
I finished by saying, “if all else fails show ’em pictures of your cute kids! How could anyone resist??” I wasn’t really kidding. The more you can connect with customers as human beings, the more likely they are to stick with you for the sale.
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| Special gift wrapping like this is just one way to fight “showrooming.” Photo courtesy of Daniel Gordon. |
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
Absolutely. Great reasons, Becky. We can and do offer something of value more than online. If in a world where convenience and price were are important deciding factors, you’ve got to get creative and offer something of real value to earn the business. Great article and something all small business owners should be very aware of. Happy Holidays everyone!
Dan, thanks for the inspiration to write this, and for all you do with your own local business. I hope lots of people get those lovely navy blue gift bags under their tree this Christmas. :)
I certainly agree with ALL of the above, I would also add that you can launch your own campaign to welcome this. I am betting that most shoppers don’t realize that retailers know. They enter the store, compare the price and walk out. Why not invite the comparison and ask them to ‘give us a chance’. Personally, if you land within 10, maybe even 20% of the online price, I’m going to buy with you because:
1. I’m there and I can walk out with the item.
2. The opportunity to compare created an opportunity to build a relationship and I’m spending $ with people I know.
3. I understand that more of my money stays local when I spend it with you. (I know that mostly because I listen to Becky, but hey).
Those are my thoughts. Create your own personal “Give us a chance!” campaign. Let folks know that you know they are showrooming and take advantage of it.
Rob, I like the idea of a “Give us a chance!” campaign. Thanks for sharing the reasons that influence your thinking, too.
Here is some advice from The Retail Owners Institute – http://www.RetailOwner.com – published in our newsletter on November 19.
“Say you spot a customer in your store who is price-checking your merchandise, and is actually on the ecommerce website of an online retailer. Approach the customer, and encourage the customer to put the product into the online Shopping Cart.
Why? Because only then can the customer see what the total cost of buying it online would be. Only after the product is in the Shopping Cart are the costs of shipping and sales tax added in. That is the price the customer needs to compare.
So, encourage the customer to get complete price information. And, at that point, when both the customer and retailer see the total online price, then an actual comparison can be made.
Some customers discover that they won’t be saving much, if anything, by buying online. Essentially, this retailer uses showrooming as a “teaching moment.” He helps the customer discover for themselves what their actual cost would be.
Even Better: Do the Showrooming FOR the Customer
What if you can’t intercept every showrooming customer? After all, they often try to be discreet about it! Or, it might feel too confrontational for you. Here’s an idea: provide the price comparison for them!
– Pick a product that you feel is most vulnerable to being showroomed.
– Go online, find that same product, and put it in the Shopping Cart.
– Use a local ZIP code for the shipping address.
– Proceed to Checkout, so you can see the total actual price (including shipping, tax, etc).
– Take a screen shot of the Checkout screen.
– Use the screen shot to create a “shelf talker” to display alongside the product.
– Do this for as many products as you wish.
This is what the big guys call “price transparency.” We think of it as retailers working smarter, not harder. You’re giving the customers what they want, which in this case, is the facts about whether they could save money by buying online. Happy “Proactive Showrooming”!!
Thanks, Retail Owners Institute, for sharing your own campaign idea. I think it could be extended out to social networks and emails to customers as well.
A couple of comments Daniel Gordon received on Twitter were worth sharing, too.
Clayton Dorris said, “I ‘showroom’ big box nearly everyday, but if a brick business offers a better customer service experience then I will buy there.”
Nice to know we may be making headway!
And Tom @bassnote said, “I used to showroom, but don’t anymore. If I need something, & can wait, I pretty much buy it online. If I need it now, I’m local.”
“I already know I can find it cheaper online, why look it up? If you can’t wait, then get it at a local retailer.”
“That being said, there are some things that can’t be bought online easily. Things that aren’t mass produced. Local does 4 that”
Fascinating perspective.