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[December 17, 2012]
Retailers focus on turning 'showrooming' shoppers into loyal customers
Dec 17, 2012 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- Some big retailers are embracing rather than fighting the growing number of holiday shoppers who come to their stores to browse with the intent of buying online from someplace else.
Both Fry's and Best Buy say they hope to turn shoppers who come to their stores to "showroom," as the industry calls it, into loyal customers by instantly matching online prices and providing what they say is better customer service than their online competitors.
"We're very confident that this is an opportunity for Fry's to shine," said Manuel Valerio, a spokesman for the San Jose-based retailer. "Many times people want to kick the tires, so to say, but they also come in because we often have the lowest price. If not, we'll price match it there and then." About 56 percent of holiday shoppers plan to check out clothes and gear in person this year and then buy online, according to retail consulting firm Accenture Research. Around the country, 19 percent of shoppers told Accenture that they even plan to use their smartphones or tablets to compare prices while still inside a store.
Ruth Miller, of Santa Cruz, estimates she buys eight of every 10 items online -- usually after checking them out in a brick-and-mortar store.
"I like to try on boots in the store. I like to try on clothes in the store and I like to check out video and audio equipment in the store," Miller said along Santana Row in San Jose last week. "I'll go in and look and, if I like it, I'll buy it online." Best Buy estimates that 15 percent of its 600 million annual shoppers enter its stores with the same intention.
"They come in with the sole purpose to 'showroom' and not buy anything," said spokeswoman Maggie Habashy.
Like Fry's, Best Buy this year joined major retailers such as Target and Walmart in offering instant online price matching to combat "showrooming." "We see 'showrooming' as a great opportunity to greet our customer," Habashy said. "We fully embrace 'showrooming.' " Fry's, which has six Bay Area electronics stores, for years has refunded 110 percent of the price difference for any item a customer buys and then finds cheaper at a different brick-and-mortar store. Now Fry's sales associates, with the approval of a supervisor or manager, also can match online prices instantly, Valerio said.
This year, Cyber Monday sales totaled $1.46 billion, as measured by comScore, and set a record for one-day online sales. The surge in online sales presents an expensive dilemma for traditional retailers who typically have to charge higher prices to keep the lights on and cover other overhead costs, including salaries for salespeople.
"Across the entire spectrum of big-box discounters, consumer electronics and fashion retail, this is a major issue," said Jason Buechel, managing director of Accenture's retail operations practice.
So are traditional retailers giving away the store by matching lower online prices The answer relies on the ability of retailers to go beyond price matching, said Sheri Petras, CEO of CFI Group, a customer satisfaction technology and analytics firm that works with businesses to identify customer satisfaction.
Customers tell CFI that they value service, sales associates and the shopping experience, so a "poorly executed price-matching strategy will destroy loyalty rather than build it," Petras said.
"There is an opportunity for retailers to set themselves apart and showcase their competitive advantage outside of price such as delivery options, product depth and the ease of purchasing." Cameron Yuill, founder and CEO of AdGent Digital, agrees that online price matching is only one part of a plan that can turn online shoppers into loyal in-store customers.
"It's possible for brick-and-mortar retailers to put strategies in place to counter 'showrooming' by engaging those customers directly and providing excellent service," Yuill wrote in an email. "The concept as a whole, however, is here to stay, especially now that mobile technology has become so integrated into the shopping experience." Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.
By the numbers 56 percent of holiday shoppers plan on "showrooming" this year by shopping at traditional stores and then buying online.
54 percent of shoppers prefer to buy online if a retailer offers the same product online and in a physical store.
25 percent of Bay Area shoppers plan to use smartphones or tablets to make holiday purchases.
$1.46 billion in Cyber Monday sales this year set a one-day online sales record.
Source: Accenture Research ___ (c)2012 the San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT Information Services
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