The Australian Small Business Blog

Wednesday, January 16, 2013

Showrooming – The Retailers Nightmare

by Dr Greg Chapman

Showrooming is the practice where customers visit a retail store and use the expertise of the salesperson to decide what to buy, and then search online for the cheapest place to buy the product they want, which is generally not the store where they received the valuable advice and expertise. There are even Apps you can use on your smartphone where you can take a photo of the product you have decided on with the help of the salesperson, and it will tell you the cheapest place to buy it from.

How can retailers compete?

I was asked this question by journalist, David Wilson, who has written an excellent article on the subject in the Sydney Morning Herald. Unfortunately due to space consideration, he could not include my full response. Here it is in its entirety:

It is difficult to see how traditional retailing can withstand showrooming, so retailers need to totally revamp their offer. There are a number of ways of doing this, and mostly it comes down to exclusivity. For example, Apple products are never showroomed because you can only buy Apple products from one place, the Apple Store, and in that store you can get almost unlimited support.

But what if you don't have your own products? The answer may be to only show product from a supplier who has a very tightly controlled distribution network and a well developed brand, with limited outlets in any geographical region and if available online, only at undiscounted prices so they are not competing with their retailers.

Stores could also package consulting with their product sales. In this case, a customer would book and pay for a consultation with an expert in the store who will tailor a precise solution to their needs which might be a mixture of products. For example, customers might be seeking a summer wardrobe for a range of activities with the consulting on colours and style that will make them look their best.

While not eliminating showrooming, stores should reposition themselves as selling solutions rather than undifferentiated product. This model is all about service, service service.

May Your Business this Year be - As You Plan It.

Over to You. What do You Think? Post Your Comments Below. [Note to those seeking a free ride on our google ranking, blog spam will be deleted, but genuine contributions will be happily approved.]

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.

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