A recent study of showrooming activity is more bad news for retailers that subscribe to the conventional wisdom that mobile is a threat. But a couple of forward-thinking merchants -- Nordstrom and Best Buy -- are looking to use mobile to their advantage.
Some 43 percent of consumers showroom, according to a Harris Poll released this week. Best Buy and Walmart are the most popular showrooming destinations (24 percent and 22 percent). And Amazon is the most likely beneficiary of showrooming; more than half of showroomers said that's where they buy (57 percent), according to the poll.
Showroomers spend an average $211.80 per purchase.
But retailers aren't taking the competition lying down. In the latest effort to make brick-and-mortar shopping more attractive, retailers are tossing cash registers onto the junk heap, replacing them with mobile devices, according to a report on NPR.
The benefits: Mobile associates are more convenient than asking consumers to stand in cash register lines. And no cash register lines means less time for customers to change their minds about buying products and walk out. Also, mobile technology is often less expensive than traditional PoS, and removing cash registers frees up real estate in the store.
Nordstrom is a leader in this trend. It's replacing cash registers with modified iPod touch devices containing barcode scanners and credit card readers. When a customer finds merchandise they're ready to buy, a sales associate simply swipes the bar code and credit card, the customer signs with a fingertip, and is good to walk out the door.
"We think the days of the big clunky cash register... anchoring down a department are really going away," Nordstrom spokesman Colin Johnson told NPR.
And mobile is key to turnaround plans for Best Buy, says Stephen Gillett, the company's new VP of digital, global, marketing, and strategy, told Wired.
"We have a range of opportunities," he says. "There are challenges, but I like the set of cards I have been given."
Best Buy is closing stores -- a process that is limited by long-term leases. And the company is looking to turn remaining stores into an advantage by striking at mobile commerce's Achilles' heel. "People want to try before they buy, and they can't do that on Amazon," writes Wired.
And Best Buy marries its brick-and-mortar presence with its own online business. By revenue, it's the 11th largest e-commerce site, at about $3 billion per year. "That's a fraction of Amazon's electronics business and just 6 percent of Best Buy's total revenue, but it's growing by 15 to 20 percent every quarter," Wired says.
Retailers like Best Buy and Nordstrom are showing the way to beat showrooming. Instead of running away from mobile competition, retailers need to embrace it.
Circuit City's slogan used to be, "Where service is state of the art!" My wife and I used to joke that it was state of the art for the Soviet Union in 1965.
B. Krafte - I would not describe Best Buy as showing lack of vision. Quite the contrary, they've been aggressive online and enthusiastic adopters of marketing automation. I don't know why they've been struggling, but I suspect it has to do with real-estate costs they're contractually committed too, along with the usual difficulties of turning around a large enterprise.
I've had such problems with the commissions-driven assistants in clothing stores, that it's deteriorated into me circling the store, trying to get away from them, dodging around corners... Ridiculous. I've usually had the opposite experience in tech stores; can't find anyone on the floor.
First let me talk about my behavior, which I think many people can relate to. For electronics I do some research online, when I'm down to 2 or 3 options I go to Best Buy and get a better sense of them. But THEN, I almost always go online and look for the best prices.
How can Best Buy capture clients like me? They should add value and make me change my decision that price always beats everything else.
"People want to try before they buy, and they can't do that on Amazon"
Mitch,
Wired's assertion has a lot of truth to it and right that it can't be done within the confines of the strictly online marketplaces. The question is however, given Best Buy's and the others who have shown a lack of vision and imagination over the past decade, will they actually be able to pull off a marriage between their retail store presence and the online business?
Best Buy is certainly well positioned to do just that; transition its traditional retail model into a showroom model, redirecting the purchasing process to online, mobile and self-serve kiosk platforms. Leveraging their current retail presence by converting their more heavily trafficked stores into showrooms while closing the rest as leases expire would be a smart strategy. It will reduce costs, increase margins and potentially establish the company as distribution powerhouse (not to mention save themselves from complete self-destruction). If they do it right, they'll also use the opportunity to transform themselves into a customer-centric brand digging out from behind what has to be one of the worst customer service reputations among retailers.
kiranIE - Clingy sales associates aren't a technology issue -- they're a training issue. The associates should learn how to read a customer.
I do know what you mean, though. Sometimes I'll go into an electronics store just to pass the time, and sometimes I feel uncomfortable telling a sales associate, "Just browsing." Now that I've articulated that thought, it seems very silly though.
The Apple stores themselves are following the same model. And I have to say I was plesantly surprised when a rep helped me with one of the products and when I had made up my mind, immediately scanned my card in a handy machine- off I go!
With that said, I do feel customers need some space for themselves. I need to be able to walk around the store and feel the product for myself. And I will admit most times the reason why I never get around to buy a certain thing is because the clingy salesman never leaves my side and allows me the comfort to experiace the product. I wonder having all the employess on the floor would further exaggerate this phenomenon.
You know I'm perfectly willing to shop online with an etailer without seeing a product, but it's the returning of things that irks me.
How about an etailer that simply has small customer service kiosks with a live representative to deal with things?
So, for example, I was all set to press the button and order a $67 dollar android tablet from someone I had not dealt with, but a few facets of their website made me question things.
I read some reviews and found both praise and some who said they could not return goods. (Of course now we can't trust reviews either!)
If I could just meet up at a mall with someone to assure me and answer those last nagging doubts...
lin cramption - Possibly people just have to get used to using the roving cashiers. And Nordstrom may have to do more to educate customers on their availability.
Ryck - The waiting point would only be used when the store is crowded and shortstaffed. Ideally, that wouldn't happen -- you'd want salespeople roaming the floor, available to customers when needed.
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