showrooming

What Is Showrooming? Showrooming In A Nutshell

Consumers use the showrooming technique to touch and feel a product in a brick-and-mortar store before searching online marketplaces for the best price. In essence, this enables the consumer to have the best of both worlds. Showrooming, therefore, is a practice where the consumer inspects a product in a brick-and-mortar store before buying it online for a cheaper price.

Understanding showrooming

Showrooming is a consequence of mass smartphone uptake and the increased prevalence of eCommerce companies. Unlike their predecessors, the consumers of today shop in retail stores with a smartphone in hand and are easily able to compare prices among various merchants and read product reviews.

Showrooming can be a problem for brick-and-mortar store owners who do not have an established online presence or are otherwise unable to compete on price. Online retailers such as Amazon, on the other hand, are benefitting from the trend.

How can showrooming be offset?

Showrooming is a trend that is not likely to disappear any time soon. With that in mind, here are some ways a retailer can discourage or prevent the practice:

Buy online, pick-up in-store

In the buy online, pick-up in-store (BOPIS) strategy, the customer orders a product from the retailer’s online store and then collects it from the physical store. Retailers can also benefit from this approach by locating popular items near the store checkouts to maximize impulse purchases.

Price-match guarantee

Many retailers now offer a price match guarantee to combat showrooming. This means they will match the lower price of a competitor for in-store purchases. Many consumers are attracted to this option because allows them to own the product immediately by purchasing in the store.

In-store experience

Retailers need to offer experiences that make consumers want to visit their stores. Some may choose to offer Wi-Fi or products that are not available online, while others may do the same with promotions and sales events. The business can also benefit by ensuring that the checkout process is as quick and painless as possible, with a study finding that 52% of American consumers are frustrated in retail stores because of having to wait in line to pay.

Intuitive mobile sites

In a report compiled by the Acuity Group, an intuitive and well-organized mobile site was the most important factor in a consumer deciding whether to purchase from a business. With 73% of those aged 26-45 having bought something from their smartphone, retailers must meet consumers where they are and focus on providing an attractive mobile shopping experience.

Key takeaways:

  • Showrooming is a practice where the consumer inspects a product in a brick-and-mortar store before buying it online for a cheaper price.
  • Showrooming can be a problem for bricks-and-mortar stores without an online presence – particularly if they are unable to compete on price.
  • To combat showrooming, the business has a few options. These include the buy online, pick up in-store strategy, price match guarantees, in-store experiences, and intuitive mobile sites.

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Connected Business Phenomena

Bundling

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Bundling is a business process where a series of blocks in a value chain are grouped to lock in consumers as the bundler takes advantage of its distribution network to limit competition and gain market shares in adjacent markets. This is a distribution-driven strategy where incumbents take advantage of their leading position.

Decoupling

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According to the book, Unlocking The Value Chain, Harvard professor Thales Teixeira identified three waves of disruption (unbundling, disintermediation, and decoupling). Decoupling is the third wave (2006-still ongoing) where companies break apart the customer value chain to deliver part of the value, without bearing the costs to sustain the whole value chain.

Unbundling

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Unbundling is a business process where a series of products or blocks inside a value chain are broken down to provide better value by removing the parts of the value chain that are less valuable to consumers and keep those that in a period in time consumers value the most.

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Business Model Innovation

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Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Innovation Theory

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The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

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Continuous Innovation

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That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Disruptive Innovation

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Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Business Competition

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Technological Modeling

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Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Diffusion of Innovation

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Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.

Frugal Innovation

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In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.” Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.

Constructive Disruption

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A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

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An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Idea Generation

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Design Thinking

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Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

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