Turning ‘Showrooming’ to the Retailer's Advantage
Brick-and-mortar retailers are howling about "showrooming" — i.e., consumers browsing in-store to see, touch and experience products, only to return home to buy those some products online at a cheaper price. But what if retailers could turn showrooming into an advantage?
Retailers can do just that by displaying product samples of e-commerce brands, taking orders through an existing e-commerce brand website and getting a cut of the action. Savvy retailers can even charge a base rent, calculated on sales per square foot, a model Bloomingdale's uses for its store-within-a-store concept.
Test New Categories
Here's how retailers can win with showrooming consumers: first, they can test new categories without financial risk. The biggest risk in retail is removed! Furthermore, instead of laying out cash for inventory, the retailer can generate revenue with the base rent, adding to profitability.
For example, a clothing boutique can test jewelry. A small sample presentation can remain live for six weeks in a brick-and-mortar location, with the store staff taking orders through the brand's website. If successful, the brick-and-mortar retailer can continue the relationship. If not, it simply brings in a new brand. It's a risk-free way to build their business!
Expand Business, Not Footprint
Now that you understand the basics, take it a step further. Brick-and-mortar retailers now have a vehicle to expand their business using their existing footprint. Without adding any square footage, the possibilities to expand their business across categories is unlimited.
Picture this: Some well-merchandised little nooks displaying a dozen samples from multiple new categories, with a handy tablet, along with a trained and incentivized store associate present to help customers "round out the brand" using the tablet to close a sale. Every square foot in-store becomes endlessly efficient and without financial risk.
Concerned about keeping customer relationships intact? Just enter new customers into your own database when they purchase. Chances are your customers are also buying stuff online anyway. Why not be the resource that makes the introduction?
As a brick-and-mortar retailer, you're providing a valuable benefit to growing online brands — an opportunity for consumers to physically experience their products. In the case of fragrances, they can even smell and wear the product! Today's retail stores are about "experience and entertainment" over "acquiring," but I believe the most exciting stores have the best merchandising and the best experiences.
Looking to the Future
Let's take it even one step further: If brick-and-mortar retailers can spend less time on the trade — buying and selling inventory — and more time getting to know their customers, we really have something.
Brick-and-mortar retailers can start to understand their customers’ lives. What style home do they have? Do they commute? From where to where? How? What do they do for fun? Are they married? Do they have children? Where do they vacation? The list goes on. Retailers can get to know these people as friends and solidify loyalty.
So what's the benefit for the store? Well, birthday, anniversary and holiday gifts for starters. Second, if you sell a certain type of apparel, what's the best fit in terms of home décor? What does your customer like for their homes? The more the focus goes to the customer, and the less the focus goes to managing inventory, the better off you are.
From a creative standpoint, there's another major benefit: The better a retailer understands a customer's lifestyle, the more exciting the merchandising is and the more finely focused in-store events can become. Not only is the shopping experience better, but your store becomes a destination for your customer.
Janet Valenza is president of Pop-Up Artists, a marketing agency for turnkey short-term selling space. Janet can be reached at janetv@pop-upartists.com.
