Showrooming: A Death Knell or Hidden Opportunity?

Written by:



\"RRAccording to the Nielsen U.S. Digital Consumer Report, 65% of all American adults own a smartphone, up from 44% in 2011. This trend, the ever-increasing ability of consumers to access the Internet at their fingertips, was hailed as the death knell for retail stores. Showrooming, the practice of trying out products at a store before making a cheaper purchase online, appears to be a fatal flaw for retail shopping.

What we’ve seen instead, running beyond the popular narrative of doom and gloom, is a vibrant new world of opportunities for retail brands.

And it isn’t just tech start-ups that have come to see this revolution as an opportunity. A subterranean phenomenon in the retail and consumer goods industries is the rise of omnichannel retailing. This phrase might not mean much to the average American, but if you’re a retailer like Macy’s, Best Buy or Target, this new consumer-oriented ideology is quickly becoming a way of life. Omnichannel retailing mirrors what we advertising technology companies would call “multiscreen, coordinated campaigns.” In other words, it aims to make all the avenues for a brand to engage with consumers (whether it’s online, on TV, in-store or even through a catalogue) a cohesive experience.

To move from the abstract to the concrete (or to brick-and-mortar to be exact), here are three ways advertising technology will benefit both retail brands and their consumers:

Mobilize Your In-Store Offers

Apple’s recently released mobile payment system received enormous attention, but an often ignored contribution to retail may have been made when companies like Placed began utilizing Apple’s iBeacon, which tracks foot traffic within the store and allows for the analysis of customers while in the actual retail environment. This technology, combined with real-time bidding (RTB) and the substantial data available to advertising firms, means that retailers can target consumers on premises.

So let’s say a person is browsing a line of clothing at Macy’s while shopping for the same product on their phone.The technology Collective has at its disposal would enable Macy’s to identify that consumer and send him or her a targeted ad or a deal meant to spur an in-store purchase. It’s no coincidence that the practice of matching competitors’ prices real-time is becoming more common. In fact, this hypothetical Macy’s store can identify customers at a rival location in the same shopping area, and send them a deal that could inspire a stroll across the mall to make their purchase.

Be Active and Social Online

The flip side to the showrooming coin is the emergence of “webrooming,” where consumers browse products and reviews online before making an in-store purchase. And for all those retail doomsayers, here’s an astonishing projection: webrooming is expected to result in $1.8 trillion in sales by the year 2017, while all of e-commerce sales in 2017 are expected to total $360 billion. That difference alone is worth more than the entire GDP of Spain.

Once upon a time, your shop’s window was the first contact with most potential customers, but now that ‘first touch’ can happen anywhere: a Yelp review, a Facebook link, a Twitter feed, a sidebar ad, etc. Retailers need to learn to love and respect these methods of engagement like they do their storefront.

You Can’t Spell “Happy” Without “app”

Put the time and resources into building an app and a network that gives your consumers a reason to come back. Let them know how much you appreciate their business with personalized outreach. That could mean targeted deals (“In our store, a “Birthday suit” means 30% off!”) or an effective way to follow up on customer service calls.

Consumers don’t see separate channels like retailers do; every engagement reflects the company. This means purchases made online get the same treatment as an in-store purchase if a shopper wants to return an item; and customer service is as important a consideration as data collection when you’re building an app.

We are not suggesting retailers can be complacent with their service and disruptive phenomena like showrooming will go away. Today’s consumers are well informed, and the competition is too stiff for a company not to be willing to earn their customer base. So if a company is willing to put the energy and resources into training their staff and honing their advertising technology, they’ll find out that the digital world is bursting with opportunities.



Scroll to Top
the Daily Report

Insights + Interviews right to your inbox.