Webrooming is helping retailers grow in-store visits and transactions.
Technology has radically and rapidly changed the consumer and is reshaping the retail industry with lightning speed.
Over 1 trillion in retail sales today are influenced by digital and digital is projected to influence 50% of all retail sales by the end of this year. Deloitte Digital
Digital shopping has escalated store closers. Digital retail is also impacting the size of stores, their physical layout and merchandising plans.
Mark Twain said it best over 100 years ago – “Reports of my death have been greatly exaggerated”.
The death of the physical store, due to the growing number of online shoppers, has also been exaggerated.
But, it’s also clear for virtually every retailer that lesser volume ‘brick and mortar’ must be balanced with a more aligned and robust shift to digital shopping options.
Forrester Research is forecasting mobile commerce to drive $85 billion in sales in 2014 and overall eCommerce reaching $300 billion also by the end of 2014.
Online shopping can actually enable retailers to give consumers reasons to shop in their stores.
Specifically, the practice of “webrooming”.
As the name implies, webrooming is the consumer act of doing your purchasing homework online, to better understand the product, competitive alternatives, in stock availability and of course price.
‘Forrester’s VP/principal analyst, Sucharita Mulpuru, projects that webrooming will result in $1.8 trillion by 2017 … that’s with a capital “T”!
Webrooming is like showrooming online. But, unlike showrooming, it’s helping retailers grow in-store visits and transactions. Gallop reported a 22% increase in in-store sales due to mobile.
70% of shoppers are webrooming today with the intent to buy in-store.
The reasons include the obvious price and features comparisons but others want the assurance what they’re looking for is in-stock and still others need it now, not 2 or 3 days in transit to their home.
Here are 3 key considerations to win in-store and online:
1. Online Shopper Experience
Make the user’s online experience easy to navigate and find product information on your site. Abandoned online carts most often are attributed to poor site design.
2. Offer Incentives to Shop In Store
Offer “webroomers” an added incentive to buy in your store. Experience is the ultimate loyalty card. If the site answers most of their questions and that shopper heads to your store, you have an even bigger opportunity to delight the shopper even more.
3. In Store Shopper Experience
“Showrooming” is a reality but recognizing that once a consumer is in your store you truly have the advantage to enhance their experience and your brand image!
Recently I visited my local Apple store in search of a new hard drive. My ‘digital native son’ said, Dad – tell me you didn’t buy it and over pay from Apple?”
My answer may not be the expected millennial response – but frankly I wanted to buy the right hard drive backed with accurate product knowledge and features from an Apple sales associate. In others words, a human being!
Saving time is the most precious commodity for shoppers.
Offering lower prices has long been a key tenet retailers employ to drive transactions. Often at a high cost to the bottom line. Get ‘em in the door with a price breaker, and then trade ‘em up to higher priced items or a larger overall basket.
Along with everyday low prices, a bevy of other shopper benefits are generally part of a retailers’ strategic offering- customer service, in-store inventory, product mix, physical locations, and of course, convenience – defined by speed of service, check out, easy experience and the items being in-stock when you want them.
The devastating effect on the down economy is changing most retailer views that price as the lead strategy is simply too costly to play.
Convenience is emerging as the new driver. Convenience is about one-stop shopping rather than a retailers location. Getting much of your shopping list at one location is analogous to a shopping on Amazon.
Take grocery shopping.
No longer the exclusive purview of your favorite or neighborhood super market, there is a growing number of non-traditional entries offering grocery – Wal-Mart and Target, 7/11 and Walgreen’s – have put huge financial pressure on grocery chains that are already challenged by razor-thin margin.
King Retail Solutions (KRS) in conjunction with the University of Arizona conducted a shopper study on where people are purchasing groceries, fresh prepared foods, clothing and services from a non-service provider.
Shoppers were asked where they shopped and what they shopped for over the past 12 months:
- 77% purchased groceries from a store, other than grocery
- 62% bought fresh-prepared meals from a location other than a restaurant
- 57% purchased clothing from a non-apparel provider
- 20% bought services from a non-service provider
All from the non-traditional channels which owned these shoppers exclusively for years.
Which factors drove these shoppers to purchase elsewhere? Immediately following price is convenience and quality.
Shoppers are looking to complete their ‘shopping list’ as easily and efficiently as possible and the availability of products in non-traditional channels is helping to drive this behavior.
Evidence of this trend is as close as your neighborhood Wal-Mart when grocery purchases account for over 50% of their revenue.
Key Lessons in this shift in spending:
- Shoppers are embracing the blurring of retail offerings driven by convenience of getting more items on their shopping list on the same visit.
- Price isn’t the exclusive driver for those earning $100K to $150K annually. Convenience and selection are more important.
- Millennials are setting a trend and leading the way in purchasing groceries in big box, dollar stores and pharmacy.
- Continuous innovation on the right size format and product mix will keep loyal shoppers, shopping with your brand, on and offline.
The shift to convenience and expanded merchandise offerings is well on its way. What are you doing to be on this fast-moving train?
Mobile payments is emerging as an important component of the retail shopper’s experience.
Mobile payment, also referred to as mobile money, mobile money transfer, and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Wikipedia
One study puts the US mobile payment market value at $400 trillion which explains the hundreds of different mobile payment offerings out in the marketplace. Yet, no one source dominates.
Jason Armitage, principal analyst and co-author of the report, “Mobile Wallets for the Masses”, said,
“While consumers and merchants remain intrigued by mobile wallets, no single solution has emerged victorious. As a result, the market is characterized by a multitude of mobile wallet vendors vying for dominance, with a dizzying number of available offerings. As the market matures, solutions that deliver actual value for consumers and merchants will proliferate, and clear winners and losers will become more apparent.”
This mobile wallet study conducted by Yankee Research, found that over 70% of shoppers like the idea of a mobile payments but, to date, only 14% of have actually made a financial transaction.
This is a big reason why retailers are hesitant to embrace this mobile technology that appears to be creeping along. But, adoption may be closer than you think.
Proof that consumers value the convenience and advantages of digital transactions is already as close as your neighborhood Starbucks
Starbucks has built a huge business on gift cards, which are essentially debit card models that have led the way for digital wallet success.
You can now go to a Starbucks store and place your order. Open the Square Wallet app, tap on “Starbucks” and scan your phone. Square Wallet links to your credit or debit card and uses your phone to pay at participating Starbucks’ stores as well as other local businesses.
The popularity of the Square Wallet app has been a boon to Starbucks. Over 10 million customers buy their coffee using this app and 5 million use it weekly.
But, there has been the limited number of retailers that accept mobile transactions. Even those that do might not accept your method of payment. This is another reason for the slow adoption of mobile payments
In the end, it is all about the value to both the consumers and the retailers that will drive the winning solutions to the top.
Do you think consumers are ready for mobile wallets?
At the very least, redeploy resources more beneficial to your brand while building customer loyalty.
There is no argument that retailer focus on the holiday selling season is critical to making their year. But, with Black Friday total sales dropping while Cyber Monday totals growing, the question to ask is, “Can there be a smarter way to stimulate more profitable sales?”
First, consider the fallout from the increasing practice of moving up Black Friday hours.
- Employees are asked to give up their family time on one of the most traditional family holidays of the year.
- Retailers must add to their payroll the cost of double or overtime.
- A growing number of shoppers aren’t changing their behaviors based on discounts. According to the “Deal Seekers” report, fewer than 45% of consumers are motivated by discounts and deals may actually harm brands more than they help.
- Only 12% of US shoppers actually left their homes on Thanksgiving Day for Black Friday offers, yet retailers spend a disproportionate share of their marketing budgets that ignore 4/5th’s of their shoppers.
Some of the countries most respected and successful retailers have taken the position they will NOT be open on Thanksgiving out of consideration to their employees, brand and valued customers. Among those:
- Home Depot
- Nordstrom/Nordstrom Rack
- Burlington Coat Factory
- TJ Maxx
Also, the damage to your brand in pursuit of out-offering the competition with Black Friday deals is immeasurable, especially when your store becomes the headliner on the evening news.
Can the execs at Wal-Mart honestly believe that ending up on every news outlet showing customers fighting, sustaining injuries or criminal charges all in an effort to secure one of the 5 ‘tablets’ or large screen TV’s at a fraction of their everyday price, is the impression they intended of the Wal-Mart shopper’s experience?
As you make plans for the next holiday season, here are some considerations to in lieu of aggressive pricing tactics and stunts:
- Consider your employees first: Who wants to work on Thanksgiving? All your employees to spend time the holiday with their families. Even with Cyber Monday’s growth, 90% of retail shopping still occurs in store. Why not allocate more training throughout the year that is focused on the customer experience to deliver world-class service.
- Reexamine your everyday ‘low pricing’ and value proposition year round: Margin hits due to extreme Black Friday stunt pricing may be better spent.
- At all costs, protect your brand: If your promotional tactics results in arrests, injuries or worse, its time to rethink your core strengths as a retailer.
Please feel free to share your thoughts in the comment section below.
The endless options for shoppers make shopper experience more important than ever.
Personalized customer experiences are the primary element missing from retail stores. By cultivating a superior customer experience, stores can combat the impact of showrooming and increase sales by as much as 25% to 50%.
These are some of the finding from a recent survey conducted among retail executives by TimeTrade, a leader in Online Appointment Scheduling. The survey was taken in-person at the 2013 Future Stores Conference in Dallas, TX. The research sought to gain retail executive insights about the rapidly changing retail landscape.
Many retailers are moving quickly to try to improve the customer experience as a way of differentiating themselves.
Improved training is seen as important. However, better use of technology for both call center and sales floor personnel is felt to be essential for improving customer service.
The impact of slow customer service was also explored. 75% feel that they lose customers because of wait-related issues. The reasons are varied:
- They lose customers because they cannot get answers fast enough.
- Shoppers leave because the wait takes too long.
- Long checkout lines.
- Customers is the ability to find lower prices elsewhere.
Retail executives also see a need to improve their Omni-Channel customer experience. Omni-Channel shoppers are seen as being more profitable than single channel shoppers. However, on a scale of 0-10, when asked to rate their own store’s Omni-Channel delivery and execution, retail executives rated their Omni-Channel strategy at just over five. Much work remains before Omni-Channel execution and delivery becomes the norm.
Showrooming remains a concern for retail executives. When asked the best method combat showrooming, 52% stated than an improvement in the in-store customer experience is the best way to combat the impact of showrooming.
Many retailers now embrace showrooming as an opportunity rather than a threat. Once in the store, it is the responsibility of the retailer to win (and also not lose) that shopper. Creating and interesting shopping experience with knowledgeable associates is critical.
A rapidly changing retail environment remains a challenge for stores and their executives. But retailers are clear where they have to move and evolve. The evolution of what outstanding customer service and true Omni-Channel shopping should be will be a retailer focus for the foreseeable future.
Click on the following link to for a downloadable copy of the TimeTrade: Retail Industry Executive Summary.
The retail industry will feel the impact as these retail titans aggressively seek to grow their market share.
Wal-Mart is the world’s largest retailer with approximately $500 billion in sales. Amazon – with nearly $75 billion in online sales – is striving to be “the everything store”. Each has the other squarely in its sights. The stakes are huge – both for the combatants as well as the rest of retail. The outcome is far from certain – particularly for those retailers who sell at both value pricing and who deliver things fast.
These are some of the observations from a recent article in Knowledge at Wharton (K@W) entitled “In Amazon and WalMart’s Battle for Dominance, Who Loses Out?” The strategies and investments of the two retail behemoths are shaking the very foundations of retail.
The moves of Wal-Mart and amazon are well documented. Both are investing heavily in building warehouses that will expedite the move towards same day, next day, or in-store pickup. Wal-Mart has continued to invest heavily in on-line, offering over 5 five million items and generating sales of $10 billion. Amazon pushes the envelope in various ways, such as partnering with P&G for use of their warehouses or using the US Postal Service to deliver packages in select cities.
The questions for the rest of retail are numerous. The retail ecosystem is changing rapidly – shipping, payments, mobile applications and other factors are changing the rules. Retailers will no longer necessarily be luring customers to the store. Rather, in a sense, merchandise will come to the customer.
The 60+ years old model of having a relatively good product, a decent location, good prices, and adequate marketing is no longer enough to compete. Retailers can no longer control the path to purchase. The shopper controls the many options they have for finding and purchasing products. Retailers have to respond to a fluid and uncertain shopping environment
As the saying goes, “when Titans clash, mortals often die”. However, in the Wal-Mart vs. Amazon battle, an understanding of the trends and opportunities can allow smaller retailers to survive and prosper during the coming retail turbulence.
5 answers for competing in this new retail environment:
1. Think smaller and unique
While Wal-Mart and Amazon will be pervasive in their presence, they will not be everywhere. Finding the niches and differentiated products that the giants of retail do not carry is one approach. Specialty retailers such as museum outlets can find success in this niche.
2. Find New Partnerships that Level the Playing Field
eBay supplies networks for businesses that cannot create their own. Partnering in some form allows smaller businesses to compete with larger retailers in a more cost-effective manner.
3. Think Bigger if You Can
Google is moving into shopping and merchandise more directly with Google Shopping Express. While Google makes its money on search, this venture – a delivery program that includes partners with retailers such as Target, Office Depot, and Walgreen’s – allows Google to be a major player in retail while continuing to be the major search source.
4. Understand that the Lines are Blurring
What traditionally passes for advertising, distribution, online, shopping is changing and blurring. All may be available in any program. The lines between one discipline and another may no longer be clear. Developing approaches that recognize this trend can allow smaller retailers to compete. One example is the online magazine Net-a-Porter. Consumers can read about up-to-date fashions, view examples and purchase products.
5. Establish an Effective Loyalty Program
While Amazon has an effective loyalty program in Amazon Prime, Wal-Mart does not have such an established program. This creates an opportunity for smaller retailers to compete against one of the major players on equal footing.
Click on the following link to read the K@W article, “In Amazon and WalMart’s Battle for Dominance, Who Loses Out?”