“Showrooming” has become a common retail-industry buzzword, one that typically spells gloom and doom for brick-and-mortar retailers.
So why is an executive at Minneapolis-based Target Corporation heralding showrooming — the practice of shoppers browsing products in a store just to later purchase them online — as “the greatest opportunity for retailers”? And is such optimism merited?
Casey Carl, Target’s president of multichannel, wrote in a recent blog post that showrooming poses a threat to retailers like Target that have a significant investment in real estate and physical stores.
“However, less publicized is the fact that showrooming is also the greatest opportunity for retailers,” he wrote. “As my colleagues and I have said several times: ‘We love showrooming — when Target gets to book the sale.’”
Carl called attention to Target’s efforts to enhance both its physical stores and digital channels in order to remain competitive; for example, the company made free WiFi available in its stores and rolled out a new website called “Cartwheel,” which allows bargain hunters to interact and shop via Facebook.
Another example is a new store-and-online initiative called “Baby 360,” which includes beefed up online content, product reviews, and recommendations for new and expectant mothers. In some Chicago-area stores, meanwhile, Target has added “Baby Advisors” to assist with guests searching for baby products. (The concept is similar to the in-store beauty consultant offering that Target recently debuted.)
Carl cited mobile technology a key game-changer, noting a Deloitte study that found more than half of smartphone owners have used their devices when they shop in a store. Meanwhile, smartphone shoppers are 14 percent more likely to purchase in-store—and that percentage more than doubles if a customer uses the retailer’s site or app while in the store, Carl added. In other words, there can be a sort of reverse-showrooming, whereby digital technologies bolster in-store purchases.
“Fully embracing showrooming means seamlessly integrating the physical and digital worlds — from products to price-matching to personalized offers — to exponentially improve the guest experience,” Carl said.
But can brick-and-mortar retailers really turn the tide and capitalize on showrooming, or will the practice continue to eat into their market shares?
Embracing showrooming is part of a broader industry strategy called “omni-channel retailing,” according to David Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas. “It’s an attempt, and a good attempt, to be transparent among all platforms,” he said.
In other words, Target is not alone in its effort to better integrate brick-and-mortar stores with online channels. Too, many have launched in-store price-matching efforts in order to disincentivize the practice of visiting stores and then purchasing from online competitors. In January, Target announced such an effort; Richfield-based Best Buy Company, Inc., which has often been cited as a prime showrooming target, did too, claiming that the effort would effectively end showrooming at Best Buy.
Brennan predicts that more retailers will begin offering consumers the opportunity to purchase an item from their website and then pick it up in a local store; such a practice gives stores the upper hand over e-commerce sites that charge for shipping. (Target recently said it will roll out an in-store pickup program for the holiday season; some competitors, like Wal-Mart, already do it.)
“I think there’s still going to be showrooming, but if the prices online are similar, a flattening of the field may take place,” Brennan said. The playing field may be leveled even further through Congress’ push to collect sales taxes from more online retailers. (Amazon is adamantly fighting such a change.)
Target’s Carl, meanwhile, seems confident that forward-thinking retailers can take advantage of the changes. “At Target, we believe showrooming isn’t just a win for shoppers,” he wrote in his blog post. “It’s going to be a decisive win for retailers that up their game.”
This article is reprinted in partnership with Twin Cities Business.