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Tag: showrooming

  • Report Finds Consumers Making Purchases More Quickly

    Report Finds Consumers Making Purchases More Quickly

    Parago has a new report out indicating that consumers are shopping across channels more quickly than ever before, thanks to brick-and-mortar, online, mobile and social channels enabling them to quickly find good deals which can be be taken advantage of in little time.

    The average time to purchase across retail categories is less than four days, even for big-ticket items like appliances, according to the report, which is based on a survey of over 1,500 people said to represent the U.S. consumer population.

    65% of respondents said they’re more sensitive to price now than a year ago, while 88% look for deals, rebates and best prices before shopping.

    Four out of five 18- to 49-year-olds own smartphones, with nearly 50% of all shoppers comparing prices in-store using smartphones, according to the report.

    “Retailers have a lot to contend with in this new era of shopping: highly competitive prices from e-tailers like Amazon, rising smartphone adoption, the showrooming boom and incredibly price-sensitive consumers,” said Parago CMO Rodney Maso. “For retailers to thrive, they need to disrupt the path to purchase with a dynamic, real-time pricing model. Not just online, but in brick and mortar, too.”

    “Our research shows that dynamic-price rebates are one way to respond to consumers’ demand for lowest price and protecting margins, unlike across-the-board online price matching,” he added.

    Nearly all (99%) of shoppers surveyed with incomes at $50,000 and above shop from their computers, with two out of five shopping from tablets.

    You can find the full report here.

    Image via Parago

  • 40% of Americans Have Engaged in ‘Showrooming’

    The rise of online retail has certainly forced physical retailers to both rethink their business models and compete with companies that do not have to deal with store overhead. In addition to competing on convenience and price, physical retailers are susceptible to the phenomenon of ‘showrooming’ – the consumer practice of using retail stores as showrooms for products they intend to buy online.

    Today a new Gallup poll has revealed that at least 40% of Americans have engaged in showrooming. The survey also found that more wealthy Americans (those who make over $90,000 per year) were more likely to be showroomers, with over half of those surveyed (53%) saying they had showroomed at least once.

    Though these numbers may look dismal for physical retailers, Americans are still prone to making purchases in-store. The same poll found that while many Americans engage in showrooming, most do not do so on a regular basis. The survey found that only around 9% of Americans bought or soon intend to buy online a product they shopped for in a physical store.

    Physical retailers might find relief in the fact that Americans are still prone to purchasing goods offline, but the showrooming trend is one that will only increase as online retailers become ever more convenient and efficient. Gallup suggests that stores can work on their customer engagement to ensure sales happen in-store. Other market analysts have provided possible long-term solutions, including the suggestions that physical stores use their premium space to sell advertising – essentially embracing the concept of showrooming in full.

  • Why Smartphones Are Forcing Retailers To Rethink Their Business Models

    Why Smartphones Are Forcing Retailers To Rethink Their Business Models

    As smartphones become more ubiquitous in established markets, traditional business models have begun to quickly shift and adapt. Entire markets based on specific technologies have been wiped away by a handful of smartphone apps. The instant access to information that smartphones provide has also superseded a number of traditional information-based businesses.

    Perhaps more than any other, the retail industry will have to change significantly in the face of advancing mobile technology. With an ever-growing variety of products available online, physical retailers are now competing with both massive online retailers and niche product sites that do not have the overhead of real retail locations.

    Specifically important to physical retail channels is combating the phenomenon of “showrooming” – when customers use retail stores to look for products they intend to order online. In recent years physical retailers (such as Best Buy) have begun to combat showrooming with price matching and service schemes, with varying success.

    How can retailers battle showrooming? Let us know in the comments.

    Market research firm ABI Research today released its quarterly “Retail Technologies” report, which predicts some of the changes coming to the retail industry. The firm believes that technologies related to NFC, RFID, apps, analytics, and even signage will “revolutionize” the retail space, turning it into something that might not have been recognizable even just a few years ago.

    Smartphones create a platform on which to unite the variety of different technologies deployed in-store,” said Dominique Bonte, practice director at ABI. “This creates huge potential to significantly improve the customer experience as well as streamline existing pain points such as staff efficiency, product discovery, queue management, coupon redemption, linked loyalty programs, and closing the redemption loop on offers/advertising.”

    The most obvious application of smartphones for retail come on the customer side. Retailers (especially grocery stores) are now offering well-designed apps tuned to keep consumers engaged with stores and their products. These apps are a direct way for brands to manage their customer relationships by providing discounts, coupons, and other offerings that keep consumers coming back to physical retail locations.

    These same apps can serve as a vector for roping consumers into loyalty programs. Online wallet services may already be ahead in that space, but retailers have the advantage of mailers and employees to help push adoption of such programs.

    In addition to consumer-facing applications, smartphones could end up significantly altering the point-of-sale systems that businesses use. Already some retailers are using associates with smartphones to help relieve POS lines and check customers out while on-the-move. Holiday shopping customers will see more of these systems than ever in the coming months.

    NFC mobile payments and mobile wallet services are finally rolling out in the U.S. and Europe. Though Apple has resisted leading the NFC industry by leaving the technology out of its iPhone devices, banks and mobile providers have already invested heavily into NFC infrastructure.

    For consumers, NFC technology will mean easier, faster payment processing and a reduced need to carry around cash or credit cards. For retailers, the ease of mobile payments with NFC and competing technologies will mean faster POS interactions and less employee overhead.

    Another, more radical change coming for retail could be the tacit adoption of showrooming as an alternative to retail sales. ABI believes there is plenty of opportunity for retailers to take on lucrative advertising contracts for their in-store displays and signage. With convenience and pricing now being won by online retailers, the physical space that retailers inhabit could be among their most lucrative assets.

    Should Advertising become a major revenue source for retailers? Let us know your thoughts in the comments.

    This advertising opportunity could easily extend to retailers’ new apps. Indoor location services technologies are ramping up and hold the promise of pinpointing customer desires in a way that only online retailers currently can. Consumers browsing store shelves in the near future could soon begin receiving competitive offers from the brands they are comparing in real life.

    “Smartphones will completely revolutionize the existing analytics, CRM, digital signage, loyalty and POS markets, not to mention opening up a whole new medium for retailers to sell advertising to brands,” said Patrick Connolly, senior analyst at ABI. “Major grocery stores generate as much as 20% of total revenue from standard in-store branded advertising today. Imagine the potential of personalized in-aisle advertising.”

    Even just a few of these technologies becoming widely adopted in the retail space would be enough to change the industry in significant ways. Inferring from Apple’s success in the retail space, store locations could increasingly become true showrooms for products as store employees begin to take on the role of marketers for different brands.

    Malls of the future could become only extensions of online services and businesses, with customers perusing specific products in small, branded kiosks before making split-second purchases with their smartphones. With these same technologies affecting the distribution industry as well, those products could even be waiting for customers at their doorstep as they return home.

    What will the future of retail look like? Leave your ideas in the comments.

  • Store Charges $5 Browsing Fee to Combat Showrooming

    Store Charges $5 Browsing Fee to Combat Showrooming

    In order to combat showrooming, one Brisbane, Australia store is taking to some rather extreme measures.

    The store is now charging people a $5 “just looking” fee in the hopes of deterring them from using the store as a physical showroom, and then running off to buy the same products online.

    If the customer ends up buying something, the $5 fee is waived.

    “There has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else. This policy is in line with many other clothing, shoe, and electronic stores who are also facing the same issue.”

    The sign went viral on reddit, as user BarrettFox said that “when they open tomorrow I’m going to see how many times I can walk in and out without paying the toll.”

    AdelaideNow tracked down the specific store, which happens to be a Celiac supplies store in Coorparoo, a suburb of Brisbane. The owner of the store, which sells gluten-free products, says that she was tired of “spending hours each week giving advice to people who leave empty-handed.”

    She claims that around 60 people a week would come in, browse, ask her questions, and then leave to buy the product online (she assumes).

    “I can tell straight away who are the rat bags who are going to come in here and pick my brain and disappear,” she said.

    Many business owners, from companies as large as Best Buy to small businesses like this one, can surely relate to the frustrations of seeing people use their store as a testing ground for Amazon. But on the other hand, if you have competitive prices and hard-to-find products, do you really need to be charging a $5-a-head browsing fee?

    Pissed off at people for showrooming or not, it simply seems like bad business any way you look at it.

    [h/t BoingBoing]

  • Consumers are Spending Billions Through Their Tablets

    Last week, analyst predictions asserted that tablet shipments could reach 145 million in 2013. The market for tablets is only swelling, and now research firm ABI Research is predicting that an additional 1 billion tablets will be shipped over the next five years.

    Even more interesting, though, is ABI’s research into how much consumers are spending through their devices. According to the firm’s survey, 22% of U.S. tablet owners are spending $50 or more per month through their tablets. 9% of U.S. tablet owners are spending $100 or more per month. ABI points out that these spending levels are far higher than those seen for smartphones.

    “Tablets are quickly becoming the go-to transaction screen within the home,” said Jeff Orr, mobile devices senior practice director at ABI.

    ABI stated that tablet spending hasn’t yet impacted physical retailers, who are concerned about “showroom” shoppers who use physical stores to shop, ask questions, and compare features before leaving to make their purchase online. The research showed that over half of consumers who shop on tablets had done price checking, used a coupon, and made a location-based search in the past three months.

    “The opportunity to keep consumers buying in-store squarely remains with the retailer,” said Orr. “So far, the presence of a media tablet during the shopping experience has not altered the sales channel where consumers finally buy products,”

  • Samsung, Sony Barring Retailers from Discounting TVs

    Samsung, Sony Barring Retailers from Discounting TVs

    Samsung and Sony have both commenced barring retailers from discounting television sets to protect profits, in an attempt to cut down on ‘showrooming.’ Showrooming is the practice of consumers going into a big box retailer and then likewise buying the tested product online for cheaper.

    The practice of showrooming has affected the business of Best Buy, which has shut down some stores recently, and is also rumored to be the reason why Target stopped carrying Amazon’s Kindle tablet. The retailer likely became weary of shoppers being able to use the device to instantaneously order most products sold in its stores by logging on to Amazon for some one-click purchases.

    Apple has historically maintained strict pricing policies, and Sony has had a hand in controlling the lowest retail prices merchants can allow. Still, LG and Panasonic allow discounting, which can add a competitor threat to the existing problem with showrooming. Consumers should’ve expect to see any discounted Sony or Samsung TVs in the bear future, though one shouldn’t hold their breath on any sort of deal regarding Panasonic’s upcoming 145″ 8K Plasma TV.