How retailers can outdo showrooming with in-store Wi-Fi

1Executive Summary

Showrooming. Everybody’s heard of it by now — conniving shoppers checking out a product in a retail store, then buying it online later for less. Best Buy’s dramatic 2012 stock price decline from more than $27 to under $12 was largely blamed on showrooming, though it is not the only retailer affected. A recent study from location analytics firm Placed shows that showrooming also affects Bed Bath & Beyond, PetSmart, Toys”R”Us, and Target with Amazon.com being the chief beneficiary.

Best Buy and Target fought back with internet price-matching trials during the 2012 holiday shopping season and have since made the programs permanent. Other tactics retailers are trying in their attempt to turn the tide on showrooming include dispatching sales staff to aisles where customers are searching Amazon.com from their smartphones, pressing harder for shoppers to download their mobile apps, and even charging a $5 refundable “browsing fee” to cut down on non-buyers wasting staff time by asking questions.

Given the documented ability of mobile apps, search, and social networking to lift sales, it makes forehead-smacking sense for retailers to shift their focus away from sales lost to showrooming into harnessing the shopper’s in-store wireless experience for themselves and their brands. If customers are going to search the web for product information from their phones no matter what, why not enable the experience by providing robust in-store connectivity? In addition to making mobile-data-hungry customers happy, customer-facing in-store Wi-Fi networks enable a retailer or venue operator to:

  • Raise customer value by presenting timely offers, rewarding customers for interacting with the store or brand or for buying things, creating a more personalized and intimate relationship with each shopper, and making it easy for shoppers to connect their in-home, out-and-about, and in-store shopping experiences
  • Capitalize on the high level of correlation between mobile shopping app use inside a store and purchases on the same day
  • Capture valuable business intelligence that can help stores fine-tune sales staffing, merchandising, and inventory composition by understanding how many shoppers walk in versus how many walk by, where they go in the store, how much time they spend in the store, what they search on the internet, and how many become buyers
  • Create a new revenue stream by delivering mobile ads to shopper smartphones and tablets that are using the network

Thumbnail image courtesy of flickr user roblawton

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Laurie Lamberth

Associate Partner 151 Advisors

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