I'd been asked by my wife to pick up the new cook book by the celebrity chef, Ottolenghi and there it was in its shiny cover, sitting on the bestseller shelf looking lovely and pristine and just waiting to be bought - a snip at £27 - or was it? In a jiffy I'd whipped out my smartphone and with my Amazon price Checker app I saw I could get it for only £15. Pangs of guilt ran through my body, visions of bookshops being boarded up and tumbleweed rolling down the high street but then I thought, sod it and and I pressed the buy button!
And before you think 'showrooming' only affects mass market retailers of commodity products, think again. Later that day I was in Liberty's, which by anyone's standards is posh and I was looking for a rather cheeky little eau de toilette I wear called Creed Santal - ok, ok but if you could only smell me now you'd know how good it was, apart from my wife that is, who says it gives her a headache and makes her feel queasy. Anyway there it was at £155 (I know, I know but it does smell really good) but before you know it I was whipping it out again and searching for it online and lo and behold less than sixty seconds later there it was at £100. Ok it was from cheapsmells.co.uk which doesn't have quite the cache of the purple Liberty's bag but what the hell, my thumb hovered for a millisecond and then pressed down on the buy button.
So you're now probably a bit clearer what 'showrooming' is all about and it's a growing phenomenon with an increasing number of online retailers providing apps which make it effortless to price check and order whilst in a store (someone else's store).
It was Black Friday in the States last week and according to IBM a whopping 15% of all purchases were made using a mobile online device and one can only assume that the vast majority of those were 'showrooming'. Several reports out at the moment talk about exponential growth in mobile purchasing over the next few years and it sounds like they're going to be right.
Bricks and mortar retailers in the US are trying to fight back against 'showrooming' (no signs of fighting back yet in the UK ); for example, Wallmart, Target and Best Buy offer price matching (in some circumstances). If customers find a cheaper price through their smart device, they can bring their phone to the check out and the retailer will match the lowest price displayed.
Other US retailers such as Macy's, Toys R Us and FAO Schwartz are using eBay's new mobile shopping feature which delivers digital discount coupons to potential customers as they walk in to the store, via the geo-location feature on their mobiles, thus encouraging them to actually buy in-store rather than simply 'showroom.'
Obviously this all throws up some huge issues around the role of bricks and mortar stores in a smartphone world and the inevitable conclusion that there's not much of a future for many of them if 'showrooming' takes away a large chunk of their business. How do you fight back if you are Waterstone's for example? I really don't know, it's simply not a business you would want to be in and contrary to the claims of their new ad campaign, I really don't think my shopping experience is enhanced through the Waterstone's store environment and 'expert' staff - certainly not a £12 premium on Ottolenghi's book.
I understand HMV are largely being propped up by the largesse of their suppliers because the record companies want a physical showroom for their product and one in which artists can make personal appearances and pull in the crowds of adoring fans - such as Rihanna in HMV Oxford Street last week. So are Amazon going to give us showrooms in the future, or are there going be theatre like stores to replace HMV, where record companies can merchandise their stars but not actually sell any product - your guess is as good as mine.
One thing is for sure, 'showrooming' is here to stay but I'm not so sure about the High Street.
Very interesting read. There is no hope for the high street in its current form. If the internet caused the death of the high street, showrooming will be the nail in the coffin.
ReplyDeleteI don't see why current retailers cant take advantage of showrooming. In fact why it's more likely they do and remain then actually get replaced by anything less "transactional". The key problem with Philip's Waterstones experience is that he discovered a £12 price discrepancy. Who could blame him for deciding to have the book and a light lunch thrown in for the same price? Had the discrepancy been £1 or £2 would he have still made the same choice? Is £2 (the price of a small coffee) too much to have your book now rather than wait 3-5 days? Because physical retail has not yet caught up with the real time challenges of the internet is not cause to claim there is no hope for the high street as the last comment made. Smart physical retailers will catch up, they will leverage their ability to deliver an experience in store, with an offer that between price and immediacy is unbeatable by the likes of Amazon.
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