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How to Beat Showrooming

Continuing the series on the impact of mobile on retail operations, we’ll take a look today at the current state of “showrooming.” Of all the cool innovations mobile technology has brought, it’s come with some major challenges for retailers too. “Showrooming” has been the most publicized challenge, with Best Buy being the leading example.

At its low point, Best Buy’s share price dropped to nearly $11, after sitting at nearly $60 a decade earlier. The company’s made a nice recovery to about $30 per share today.

And a large part of the reason Best Buy was able to make a comeback was because it learned how to successfully combat showrooming.

What Did Best Buy Do?

  1. They Guaranteed to Match Amazon’s Price

In many ways, Amazon’s been a huge win for the consumer – and a major threat to almost every other leading retailer. With its “Pricematching” guarantee, Best Buy promised to match the price of all local retail competitors and 19 major online competitors, including Amazon.

Best Buy didn’t act at first when they learned about showrooming. They believed the instant gratification of having the product right now would win out.

But they were wrong on that. So, they eventually did this pricematch guarantee.

  1. Creating Fancy In-Store Boutiques

Really, these boutiques are like stores-within-a-store. Best Buy created partnerships with both Apple and Samsung.

  1. Partnering with Former Competitors

Best Buy approached Red Laser, an app that makes showrooming easy, to create a win-win partnership. Red Laser would allow Best Buy to deliver coupons as customers used its app.

What Can You Do about Showrooming?

You don’t have billions of dollars like Best Buy. You may not be able to tolerate a dip in prices.

But you can still mitigate the effects of showrooming, Here’s how:

  1. Avoid Selling Products Vulnerable to Showrooming

The most common products that consumers showroom are televisions, computers, and other big-ticket electronics items. They cost a lot, and prices can vary quite a bit from store to store. So it’s worth the time to try to find a better deal.

Identify which items you have that are vulnerable to showrooming. Find other high-margin items to sell.

  1. Give Customers Relevant Offers

Using NFC to serve ads to nearby smartphone users, a strong tactic to combat showrooming is to offer a discount to customers near your store. You might also use a customer loyalty program.

Those are benefits simply not available to online shoppers.

Technology is Your Secret Weapon

Even though technology makes showrooming possible, you can also use it to combat showrooming. Collect data on what your customers buy and why. Then give them the exact purchasing experience they want.