How Music Retailers Can Benefit From CONSUMER SHOWROOMING

| November 14, 2012 | 0 Comments

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

A customer with a smartphone in hand walks into your store, studies your wall of guitars, plays a couple, snaps some pictures, scans a few barcodes and then leaves without a word. What was that? What just happened here? It feels like you’ve just become the victim of a “drive by”! Nope…you’ve been “showroomed”!

Every day, “showrooming” is becoming more commonplace for brick-and-mortar stores, and many feel that it’s starting to hurt their business. Customers come into your store, examine your products, play your instruments and then shop online for cheaper prices.

Many retailers feel that they’re making it easier for online retailers to make sales. They invest in their building, advertise to bring in shoppers, stock the store, hire the staff and demonstrate the instrument, only to have the customer walk out and buy it online. Every smartphone owner has access to a multitude of apps that make price-comparison shopping easy; brick-and-mortar retailers are increasingly worried about this snowballing trend.

One of the biggest names in mobile price-check apps is RedLaser. Their app lets shoppers scan barcodes or perform manual searches by typing in a product’s name. They claim that the technology reads product barcodes more easily and accurately than other, competing apps, which may cut down search time. I installed the free app on my Android phone and searched for a Shure SM58 microphone. The app returned 58 online results, including eBay auctions (eBay acquired RedLaser in 2010), and listed a few independent music stores in the local results tab, too. The cheapest price displayed was $79.99; however, when clicked, it was actually for a replacement cartridge. Local results are sorted by proximity using the location (provided by your phone’s GPS), rather than by price. It took some scrolling through the listings to find the best price. Although RedLaser states that the cheapest prices are listed first, as was evident with my search, it might not show results for the exact product for which one is looking.

“Smartphones with their Internet capabilities have made the Web portable, creating informed and empowered consumers,” said Matt Cava, Director of Mobile Solutions for Vibes, a mobile marketing and technology company, which released its first study, the “Vibes Mobile Consumer Report.” They surveyed 1,006 smartphone users and found that 90 percent of shoppers carry their smartphones with them into stores, and 84 percent use their devices to research products to ensure they are getting the product information they want and the best deal.

There’s no doubt that the use of smartphones for comparison shopping is accelerating and the diversion of sales from traditional stores to e-commerce Web sites via showrooming could lead to long-range changes in music retailing. Small stores, especially independent music dealers, could be forced out of business, taking with them both jobs and tax revenues.

National retailers are being hit hard by the trend. Cava said, “Showrooming occurs more frequently when consumers are considering larger, more expensive purchases, such as electronics and furniture. The larger chains—while trying to curb the practice—are merging in-store and online businesses for seamless, quicker and cheaper transactions, without shipping fees.”

The Vibes report revealed that it’s not always about who is selling the product for the best price. Almost a third of the respondents used their smartphones to search for in-depth product details and, more importantly, reviews of the item. Consumers need to feel confident about making the purchase, and they turn to the Internet in search of validation of their decisions.

The report contains other startling facts. They found that 29 percent of shoppers who showroomed ended up going to that store’s Web site later to make their purchases. Some 33 percent said they visited a competitor’s Web site while in the store, 27 percent were scanning codes and 17 percent went to that store’s own Web site, searching for more product information.

Retailers today are distinguishing between brick-and-mortar and online experiences, Vibes says, but consumers are not. It’s not all doom and gloom for brick-and-mortar stores, though. There are ways to combat showrooming and to keep customers from buying elsewhere. Showrooming can be good for your business if you know how to use it in your favor.

Music retailers need to enhance their efforts and improve the flow of information, as well as the emotional connection with the store. When consumers are in your store, a decent Web site appears to be a critical part of the shopping experience. Remember, almost a third of your shoppers are looking for more product information and want to validate their purchasing decisions.

Here are some tips to help you use showrooming to your advantage:

  • Train your sales staff to observe “showrooming” behavior and approach customers proactively with valuable and relevant information. Tell the customer about the services you provide and list the benefits of buying in the store.
  • Use QR codes for your key products. You can create them for free. Almost a third of shoppers are going to your Web site to get more information about the item. Make it easy by creating a QR code that they can scan to be taken immediately to your Web site.
  • Hand out flyers (with QR codes) that reinforce the benefits of buying from your store. Remember, a third of respondents are looking for ways to validate their purchases, and help them feel confident in buying from you.
  • Improve your in-store signage. List the product’s features on a card and have it prominently displayed with the item. Include your QR code and invite people to scan it.
  • Use customer testimonials to help build confidence. Let happy customers help you sell your products. Use QR codes that link to your YouTube testimonial videos.
  • Create a video loop of customer testimonials and have it play in your store. This will help build confidence and provide immediate validation for every customer who walks through the door.

 

The presence of a smartphone in a shopper’s hands can aid you in closing the sale. In the Vibes report, 48 percent of showrooming shoppers said that they felt better about their purchase after doing some in-store research and shopping around on their phones. Researching the product ahead of the purchase creates a feeling of confidence and helps to eliminate buyer’s remorse. Consumers are relying more on their smartphones to help validate their purchases. If you use these ideas to help your customers get the information they need to make good buying decisions, you’ll earn their business and their trust.

David Hall is Vice President – Sales & Marketing for Cutting-Edge Solutions. Its eCommerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at dhall@pro-activewebsites.com.

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