Showrooming: Threat or Opportunity?

Much is being made of a trend in retailing known as “showrooming.” Department stores and big box specialty stores have become product galleries. Shoppers come into the showroom, browse available options, gather information from salespeople (if they can), and often begin their online research on the spot. Smartphones with Internet access and apps that deliver instant price comparisons by scanning a product’s bar code have taken “just looking” to another level.

This trend does not bode well for brick and mortar retailers. Even historically strong retailers like Best Buy cite showrooming as a factor in their struggling performance. E-commerce giants Amazon and Walmart have the ability to beat most retailers (online and offline) on price. And, online specialty retailers can beat brick and mortar stores on assortments because they do not have to carry inventory for store locations. Given all of these reasons, it appears that showrooming is a threat to the viability of traditional retailers… or is it?

Is opportunity available in the trend toward showrooming? If you subscribe to the belief that when you are given lemons you make lemonade, the answer is “yes.” Granted, a segment of shoppers are influenced heavily by price in their buying decisions. For other shoppers, serving them can be accomplished by transforming the product showroom to a brand showcase. For example, when you walk through the doors at an Apple store, it is a playground for hands-on experimentation with Apple products. And, knowledgeable employees are available to answer questions and provide assistance. The atmosphere is electric; you want to go into an Apple store even if you are not in the market to buy a product. Apple stores provide an outlet for us to be immersed in the Apple brand.

Unfortunately, most brands do not stir passion like Apple. The challenge is how to take advantage of the trend of showrooming instead of falling victim to it. Yes, certain defensive responses can be taken like downsizing square footage and increasing product assortments online. But, play offense, too. Three areas of focus for retailers should be:
1. Define your brand – Understand why people would want to do business with you, and it does not have to be about price! What are the values that guide your business?
2. Create the culture – Once the brand is defined it has to be spread through the organization. One knock on brick and mortar stores is that employees are indifferent and unknowledgeable. They must know their critical role in customer satisfaction and the store’s success.
3. Build an experience – Transform shopping from something one has to do to something one wants to do. Think about retailers you enjoy visiting – what is the attraction? It rarely has anything to do with price. It is the experience of being in that environment that draws you in and brings you back.

Do not write the obituary for brick and mortar retailers yet. Yes, the showrooming trend requires retailers to rethink the role of the physical store in their marketing strategy. But, opportunity exists for retailers that use their stores as the connector between their brand and customers. – Can Retailers Halt ‘Showrooming’?

Best Buy – "It’s the Experience, Stupid"

If Bill Clinton were asked to give advice to Best Buy on how to energize its business, he may very well dust off a line from the 1992 Presidential campaign. The famous line chided George H.W. Bush for being out of touch with voters’ needs when Clinton said “it’s the economy, stupid.” In the case of Best Buy, Clinton’s suggestion would likely be “it’s the experience, stupid.” Best Buy announced this week that it was closing 50 big box stores and opening 100 smaller locations. I hope the strategy works for Best Buy, but the problem is much deeper.

My trips to Best Buy in recent months and accounts of others’ current perceptions that I have heard and read reveal great dissatisfaction with the shopping experience. Need help from a knowledgeable salesperson? Good luck with that. For that matter, good luck getting help at all unless you are fortunate that salespeople will take a timeout from their personal conversations to acknowledge you. Product knowledge for the typical salesperson is limited to basic features and benefits. However, they are well schooled in pitching service plans and product coverage plans. One is left with the feeling that the aim is to extract as much money as possible from customers’ wallets.

The above commentary on Best Buy and its employees is painted with broad strokes. I know that there are many dedicated, exceptional employees working for the company. But, there are too many instances in which the experience does not add value for customers. Personally, I have gone from looking forward to going to a Best Buy store to it being an option of last resort.

Perhaps a shift toward smaller stores will create a more interactive environment. The quality of employees on the sales floor may be higher if smaller stores mean fewer positions, creating more competition. Take Bill’s advice, fix the experience, and make Best Buy an awesome shopping environment again.

NPR – “Best Buy Rethinks the Big Box Model”