“Showrooming” and the Local Economy

BusinessEnvironment

“Showrooming” is the practice of customers going into a retailer to investigate a product, whether for fit, complexity, size, operation, etc. They often rely on the expertise and knowledge of an employee or the business owner to find out more details as well.

Once they have decided on the product, they will order it instead from an internet vendor for a lower price, congratulating themselves for being a smart shopper if saving even only a few dollars.

SHOWROOMING3

Not only does the local merchant lose the sale but the profit which would have been re-invested locally goes (usually) out of state. Products also experience wear-and-tear (or damage) and often become unusable for sale as “new” items.

Showrooming

This practice is discouraging to business start-ups and entrepreneurs who are considering reselling products out of a brick-and-mortar (AKA: “Real!”) store, and is damaging to the local economy when the practice becomes wide-spread.

There IS a way to balance the worlds of physical and online retailing, to reach a sustainable medium and keep small and medium-sized businesses IN business. It involves customizing their operation in a manner similar to how shops in towns and villages near Walmart or other “big box” stores have re-invented themselves and are now thriving (look at downtown Antioch, for instance).

The American Independent Business Alliance (AMIBA) has long been a champion of independent small and medium-sized businesses, the success of which are so critical to local economies. They have compiled a list of seven ways to counter showrooming to help businesses tactically re-focus and thrive in a challenging marketplace (follow the link for details/examples of each):

  1. “Turn apples into oranges”: Ways to differentiate your products
  2. Develop cooperative partnerships with other nearby businesses to “bundle” products and/or services
  3. Engage customers
  4. Train your staff to handle potential “showrooming” scenarios: One key is to make sure you are training salespeople, not mere clerks.
  5. Educate your customers and your community about the benefits of doing business locally.
  6. Seek suppliers that demonstrate their long-term interest in your business
  7. Embrace technology and turn the tables: Make sure your employees have fast access to product information systems — and capable knowledge to use them — to answer customers’ questions.

Are there any “upsides” to the practice of showrooming? The post “Why Showrooming is Good for Retail” posits that the retail marketplace “is due for a major overhaul” and that the changes brought about by showrooming are the very changes needed to survive in the new economy.

In 2012 and 2013, Vibes (a mobile marketing and technology company) released research reports revealing ways retailers can prepare to counter the “showrooming” and turn it to their advantage, securing the sale within their brick and mortar stores.

“Showrooming is a new reality that most retailers and marketers are seeking to understand and address. Research from Vibes 2013 Mobile Consumer Report shows that personalization can help retailers combat showrooming. As the holiday shopping season approaches, this research provides insights about the reality of “showrooming 2.0,” where the trend of showrooming is now a mainstream shopping behavior that most shoppers are doing.”

– If you’re a retailer, consider some of these strategies to help make your business “resilient” in this new economy with special focus on your strengths and ways to differentiate your business from “the other guys”.

– If you’re considering starting a business locally, make sure to integrate these proven practices into your business plan.

– If you’re one of those “showroomers” who fondles the local goodies for free but chooses to purchase online and abandon your community merchants… realize that your “frugality” hurts the very businesses that allow you to do it!

(… and yes, we realize that some small businesses will fail no matter WHAT happens…)

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