The benefits of Showrooming and Webrooming

The benefits of Showrooming and Webrooming

Getting the most from multi-channel retail

By Andy Burton, Chief Executive Officer, Tryzens

One of the key findings in our latest Tryzens Expert Research Series on “Retailers must turn their attention to eCommerce as online continues to outpace the high street “, was the importance of the in-store experience to support online purchases (showrooming). For example, in online fashion, which is a successful and growing eCommerce category, 62% of consumers still prefer to try clothes in-store before buying them online.

This doesn’t mean that online and retail stores are independent channels. A compelling opportunity exists to leverage consumer preference, loyalty and spend through alignment of in-store & online activity. Retailers operating both physical stores and online shopping channels have a unique opportunity to align these two experiences to create an over-arching ‘omnichannel’ benefit by leveraging the potential points of crossover. For instance, a consumer provided with the opportunity to buy online and then to collect from store (Click & Collect) and/or return to store, creates further touch points with the customer where additional promotional and personalized interaction can take place. These interactions can also increase trust in the brand.

Positive business case backed by research

Recent research published by Harvard Business Review has quantified the value of an omnichannel strategy for one US retailer. A total of 73% of the 46,000 consumers studied were omnichannel customers who used both online and physical stores. The omnichannel customers spent an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers. Interestingly, for every additional touch point used, the shoppers spent more money in the store.  Results show that customers who used 4+ channels (for example; bought online and picked-up in store; bought in-store but shipped to home; researched in interactive catalogue and used price checker) spent 9% more in the store, on average, when compared to those who used just one channel. This suggests that incremental investment in a wide variety of additional consumer touch points could have a positive business case. If there will be an increasing number of opportunities to engage with consumers it will be necessary to align all of the back office systems to support a consistent customer experience across all current and future touch points.

Showrooming and Webrooming

Surprisingly, conducting prior online research on the retailer’s own site or sites of other retailers led to 13% greater in-store spending among omnichannel shoppers (webrooming). Showrooming, when traditional shoppers conduct their research in the store and then buy online, is not the only crossover behaviour. This finding goes against the grain of the conventional wisdom that spur-of-the-moment, impulsive shopping bulks up the in-store revenue of traditional retailers. Instead, the findings suggest that deliberate searching beforehand led customers to greater in-store purchases. Webrooming has become especially prevalent among Generation Consumer who are expert in using social media and other online resources to inform their shopping decisions.

As a consequence, store locators are an important feature to help consumers make it to the right store. Some store locator features are nearing mass adoption with approximately 50% of retailers now having store locators on product pages, auto-detection of shopper location via IP address and filtering of stores by selected product or service category.

The importance of Mobile

We have already pointed out why you should adopt a mobile first strategy. More recently, L2 reported in its Intelligent Report on Omnichannel that more than 56% of in-store retail was influenced by digital channels in 2016 and, of this, two thirds was influenced by smartphone, double the influence of desktop.

Given the importance of smartphone led searches and Webrooming, we think that providing consumers with a mobile friendly store locator, is a high priority and yet the same research shows that only 22% of the surveyed retailers offered the ability to send directions to a mobile device.

In many cases, marketing behaviour has yet to catch up with omnichannel consumers’ behaviour. Given that email is the predominant means of delivering offers to consumers, it is possible to analyse the content of promotional emails to understand the frequency of various types of offer. Promotion of free shipping exceeds mention of in-store collection by a significant margin and presumably free shipping is costing retailers significantly more than in-store pickup. In-store collection is consistent with an omnichannel customer’s expectations, creates additional opportunities to engage with the customer and so arguably should be promoted more frequently than home delivery.

Omnichannel retailing works by increasing the number of touch points with consumers. In-store collection and mobile-friendly store locators are two touch points with clear benefits but there may be no limit to the number of touch points which are productive. Talk to us about providing you with eCommerce systems, based on consistent back office processes, which allow you to expand the number of touch points with your consumers.