From Showrooming to Shopping

Urban Indian consumer has adopted online retail in multiple ways. A large proportion uses it for LFI (Looking for Information) and a smaller yet growing number is shopping online. In this current wave of e-commerce, ‘showrooming’ phenomenon is emerging. Showrooming could be compared to yester year’s ‘window shopping’ concept where customers would visit high-street stores and browse through display windows laced with dressed-up mannequins or gadgets along with their price tags. The idea was to browse and understand what is in trend and then buy something similar from a lower priced market.

Switch to 2012 and the window shopper now visits big showrooms selling consumer durables (T.V., refrigerator, laptop, etc.), browses for products, understands its features, specifications and variants, enquires about price & promotions and finally goes back home and buys the product online. This is referred to as ‘Showrooming’ and is turning catastrophic for brick & mortar retail. In India, it is most predominant in the context of consumer durables.

Recently I indulged in showrooming during the purchase of a microwave oven for my house, post which I was forced to think of how the retailer could have converted my showrooming trip into shopping trip (knowing that women are always ready to shop).

Scenario

1.     Pre-purchase - Visited sites like Flipkart, ezoneonline.com, cromaretail.com, indiatimes and compared various models from top brands like LG, Samsung, IFB on specifications and price. Finally built my mind around an LG Convection microwave (we can refer to as Product A).

2.     Showrooming – I chose to go to Croma to ‘touch and feel’ Product A and also compare it with other brands. The salesperson at Croma showed me a few models with the specification I wanted (convection, 28L). He recommended an LG model (we can refer to as Product B) with a few high-level and not detailed benefits. It almost had same specs as Product A but was recently launched and slightly cheaper. I liked his recommendation and asked if he could give me some brochures while I make up my mind. Interestingly the salesperson asked me to look up their website- cromaretail.com for more information.

3.     Decision-making – Got back home, logged into Flipkart to check Product B and saw a price difference of Rs.600 against Croma. EMI options on Flipkart were better too. Installation and demo in both cases was to be done by LG, so could not find any advantage of buying from Croma.

4.     Purchase – Ordered on Flipkart with EMI option.

Here is what I think the retailer could have done to counter showrooming and convert it into shopping (putting my observations in my favorite 3 dimensions):-

·         People (Sales staff)

o    Sell in-store, not redirect to online – To me, the biggest mistake of the salesperson was to redirect me to their website without realizing that I could also type in few other competitor URLs to compare and buy.

o    Empower the sales team - The sales team can attract showrooming customers by bundling some offers with the product, give on-the-spot discount or do a price-match with online. It may be unheard in India but is already being done in US.

o    Consultative approach – Sales staff should spend some time to understand customer requirement and provide detailed product information and compare models. In my case, information had to be probed rather than flowing enthusiastically from the salesperson.

o    Enthusiastic selling – My childhood visits to stand-alone multi-brand consumer durable retailer reminds me of enthusiastic salespersons (and the entrepreneur) who would not let you leave without booking sales. Secondly, they would not leave an opportunity to cross-sell once you have bought a product. Sadly, that enthusiasm is many a time missing from organized retail.

o    Retailer differentiation – The salesperson compared the models but never focused on why to buy from Croma when there are both online and offline options available. If there are additional services like extended warranty, Tata employee discounts, flexible EMIs. There actually existed many of these at Croma but the salesperson never discussed it.

·         Process

o    Instant gratification – This is the biggest benefit of physical retail over online. But due to high rentals, retail chains like Croma have limited inventory in back store and deliver goods from their central warehouse on the following day. If they can somehow manage a same day delivery (commonly at night), they can score much better than online.

·       Technology

o    In-store kiosk – Instead of the salesperson redirecting me online (to look for more information), the store can implement an in-store kiosk screen with detailed information about various product models along with ability to compare different models. This has the benefit of enabling the customer to make a decision in-store and close the sale.

o    Easy checkout – Checkout queues at multi-brand chains like Croma are usually long during rush hours with customers buying varied products like LED TV (avg Rs 35,000), microwave (avg Rs 10,000) and a USB drive (avg Rs 1000). For high value items, mobile POS can be used for billing on the spot to provide convenience to the customer.

o    Mobility – The staff can be empowered with tablets loaded with not just product related information but also customer database indicating customer’s loyalty information, past purchases and shopping preferences. Understanding the customer and then assisting him to buy not just what he needs but also what he wants, could enrich his shopping experience manifold. (Sadly, this is still a little far-fetched in the Indian context).

As a reader, do share your stories of showrooming, along with if you think it's a necessary evil. (Remember, the comments & related discussion can turn out to be more interesting than the blog itself )

*Image source: Microsoft
Disclaimer: The blog is based on my personal experiences and strictly reflects my individual opinion.