Shops fight Internet Shopping

Traditional Retailers Battle with On-Line Shopping

What is “showrooming”?  Showrooming is the latest trend and it means that you treat your traditional bricks and mortar shop as a handy showroom to check out products and decide if you really want to buy them – then buy the product online as it is usually cheaper.  Even cheaper use a smart phone in the shop to make the purchase!

This is causing an outcry by traditional retail shops which is a little difficult to understand when manufacturers take advantage of globalisation to source the cheapest parts and labour from around the world however retailers don’t want shoppers to do the same.

Online retailers avoid the high overheads of paying high rents, taxes and labour so that even when you allow for transaction fees, international exchange rates and delivery fees, it’s generally cheaper to buy things online than in physical stores.  Smallish items such as books and clothing which are easier to post are often cheaper and easier to buy online – no difficulty in finding a parking space and standing in queues!

It is obvious that traditional retailers need to evolve in order to maintain sales.  One way of looking at it is to look at traditional stores as service providers rather than as purely outlets for selling goods.

As shops cannot compete with internet shopping on price, the need to provide a better service.  However when facing declining sales the first step shop owners usually take is to cut staff which immediately lowers the level of service provided.

In the last year a store in Australia made headlines for charging consumers $5 to browse in the store – that is if they didn’t make a purchase they had to pay $5 to enter the store.  This was in response to showrooming by shoppers, how effective it has been is questionable.

Showrooming is growing, according to analytics firm ForeSee Results, 70% of consumers use a mobile phone in a retail store to research online prices while shopping.  This is supported by data from U.K.-based design agency Foolproof which recently released a report that showed that 24% of British shoppers showroomed during the 2012 holiday season and that 40% of that number bought from a competitor after comparing prices.

Retailers with brick-and-mortar locations are struggling with the showroom concept and are need to entice people to make purchases while inside the store.

Some retailers are looking at innovating their cross-channel marketing strategies and looking at services that are focused at engaging shoppers in new ways to entice them into stores and make purchased.

Target in the US has adopted the strategy of price-matching online competitors such as Amazon.

On the opposite side is the trend for “webrooming” or “e-rooming” – this is when shoppers search for products they want online, and then head to the store to make the purchase.  Again this means that traditional retailers need to provide excellent levels of service to continue to attract these shoppers.

So is showrooming a bad thing?

Finally, is showrooming a good or bad thing, it seems that the definite winners are the consumers who benefit from lower prices due to competition and higher levels of service from traditional stores as they try to differentiate themselves from the online experience.

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Shops fight Internet Shopping

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