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As the ‘showrooming’ threat looms, mobile is the solution

Rohit Dadwal, MMA

Asian shoppers have proven tremendously receptive to online shopping, and according to industry estimates Asia will be the leading region for e-commerce by 2016.  The growth of online shopping, the practice of flash deals and the rise of online couponing websites such as Groupon, have made shoppers more bargain conscious than ever before. Recognising that the future lies in the hands of tech-savvy consumers even large, traditionally image conscious, luxury brands are trying out an online strategy.

E-commerce has contributed to the bleak growth outlook for the retail industry and brick-and-mortar store owners are faced with immense margin pressures. In addition, property costs have risen exponentially all over Asia especially in cities, where land resources and space are limited. Owning a physical, retail outlet has never seemed like a less attractive and viable option.

Adding insult to injury for retailers is the widespread practice of showrooming by consumers. Imagine being a retailer in the current landscape and finding that increasingly customers are visiting your store, having already made up their minds to not make a purchase. They are stopping by simply to browse, to touch, feel and test out products, check prices, and compare their various options. They might then use their phone to take a picture of the product for reference or may even look up the product or similar products on a competitor’s website then and there.

A recent study by TNS study of showrooming behaviour amongst consumers worldwide found that 33 percent of people globally showroom. Of these, 21 percent use their mobile phone in some form or the other while doing so.

TNS’ study identifies how consumer shopping patterns have changed. Shoppers today feel the pressure to compare prices and product specifications online versus in-store. They use both online and offline resources to aid them in their decision making process. The use of both mediums depends on individual shopper needs, expectations and their level of ease with different technologies.

Mobile technology makes it easier for consumers to showroom, seek better prices elsewhere, and challenge the knowledge of salespersons in-store. As the number of smartphones and internet enabled devices in emerging markets increase, retailers need to address this situation quickly. The fastest way for them to do so is to incorporate mobile into their marketing and in-store strategy.

While encouraging consumers to use their mobile devices in-store does open up retailers the risk of showrooming, it also provides an opportunity for retailers to alter the course of events and disrupt the cycle of this behavior.

An important thing for retailers to remember is that they will always have a measure of advantage over purely online stores. Physical retail outlets are a consumer’s first opportunity to interact and engage with a product and brand. They also provide consumers the opportunity to connect with a salesperson, who can give expert advice on the suitability and usability of different goods.

The very fact that consumers are adopting the practice of showrooming shows that physical stores still have a place in the consumer purchase cycle. Keeping this in mind, retailers should aim to offer a seamless in-store experience by giving customers the option to engage with the brand via mobile. This could be it through a loyalty app, mobile couponing or simply accessing product information online. When used to enhance a consumer’s in-store experience in this way, which also saves shoppers’ time and money, mobile can help retailers convert show-roomers into loyal, long-term customers.

Rohit Dadwal

The author, Rohit Dadwal, is the Managing Director of Mobile Marketing Association APAC.