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Last week I wrote a blog post, about inappropriate questions that people ask business owners
and I had a great comment about the way people shop these days, from Paul. I’d love to
read you his comment because it’s very relevant.
So Paul said “What really toasts my cookies, Grrrr, is people who take up half hour to
an hour of my time asking all kinds of questions or wanting to know what I’d recommend for
their problem. Then when I ask if they want to buy the recommended product, they say,
“No, I think I’ll just buy it on the internet”. What balls!”
Paul, I love your expressions! They really bring out the Australian-isms in me.
But, it’s great, the comment, because what Paul’s describing is the way that a lot
of people shop these days and it’s called “Showrooming”.
And a lot of the big retailers are annoyed about it right now too and they’re starting
to innovate.
There was actually a really great article in Canadian Business magazine. In the article,
Future Shop, one of Canada’s biggest electronics retailers, is tired of losing sales to people
who showroom. They go home and price shop online after they’ve come in and touched
all the products in Future Shop and then they go and buy from online retailers like Amazon
based on price.
So, what they’re doing, and this is very interesting, Future Shop is reducing the size
of their retail stores to one fifth, so they’re going down to about 5,000 square feet,. They’re
reducing the number of products that are available in their store for people to come in and touch
and feel, to about 1,000. And they’re putting computer kiosks in their stores that have
links to their online competitors.
So when people come in to look at the products but they’re not sure if they want to buy
because they want to go home and price shop online, they can actually do that price shopping
right there in the store.
The other thing Future Shop’s doing is, they’ve come out with a strategy, or a policy
that’s called the “Price Beat” policy. So if a customer goes online and sees that
a competitor has that product available for a price that’s cheaper than Future Shop,
they’ll match that price and they’ll continue to do price matching for 30 days after you’ve
brought the product (if you can come in and show that the product is available cheaper).
Now what does that mean for smaller retailers?
The first thing to ask is, “What is your customers behavior?”
In the article, Future Shop knew that 80% of their customers had already been online
and looked up and researched their products before they even came into the store. So that
tells them that the retail experience is still very valuable to their customers but the online
portion of retail shopping needs to be much more integrated.
So when you have a customer that comes into your store next time and says “Hey thanks
so much for your service but I’m going to go and price shop on the internet first”,
Don’t let them get away with that, without asking them “Why?”.
You need to know, are they price shopping? Do they want home delivery? Are they not too
sure about the information that you’ve just given them and they’re wanting to do some
more research.
You need to understand your customers behavior before you can make any purposeful, strategic
operational changes to what you’re doing.
That information is extremely valuable and the fact that your customer had “the balls”,
as Paul put it, to actually tell you that they’re going home to shop online, gives
you a massive opportunity to keep them in your store and find out what you can do to
get them to buy from you. Because as soon as they leave your store that sale is lost.
What you need to be able to do is respond to what they just told you and come up with
a way to solve their need to maybe alleviate their concern that there’s something online
that’s cheaper for the same quality or that they need to do more research about what you’ve
just said.
The next step is to recognize that this is the way people shop now. It’s not going
away, it’s going to get worse. You need innovate. You need to make your internet presence,
your web presence, an integral part of the shopping experience for your customers.
Now Future Shop is huge and putting computer kiosks in their store makes sense for them,
but for you that may not make sense. But what does, is make sure your web presence is as
amazing as your retail service and experience for your customer. So when they’re researching
online before they come into your store, they’re finding videos that you’ve produced that
maybe answer frequently asked questions or they’re finding your store online and thinking,
oh, these guys really know what they’re talking about or they have a great range of
products.
Think about adding user generated reviews to your products that are featured online.
Things like that make the customer want to come into your store. Because once they’re
in your store you have the chance to make multiple sales instead of maybe that one sale
on the one product they were looking for.
So that’s the key, understand your customer’s behavior, recognizing that show rooming is
not going away, and that your web and your retail presence and the experience for your
customer needs to be integrated more than ever before.
If you enjoyed this video please share it with someone it can help. Showrooming is definitely
costing retailers thousands in sales now. If this video can help someone that owns a
retail store, in any way, please share it with them.
Also, if you enjoyed this, please sign up for my weekly email updates and I look forward
to hearing your comments about this. I’d love to know what you think and please share
with me any results you get if you implement changes, I’d love to know.
Thanks, and take care.