"Showrooming," the practice of researching products in a brick-and-mortar store and then buying them somewhere else, is getting a lot of attention lately. Not that it's anything new. Budget-conscious consumers have always been inclined to defect when presented with a better deal.
On a positive note, this practice does get customers into the store, where they are exposed to the retailer's onsite products and promotions. Then, it's up to the retailer to captivate customers and make the sale before they leave the store to purchase elsewhere.
Keep in mind, the key reason consumers come into a store is because the information they find online does not thoroughly convey what the product really looks like, how it is used or the benefits it offers. Fortunately for the retailer, most customers still insist on some level of interaction with a product before making an important purchase. Even so, retailers must counter the showrooming trend by making the in-store shopping experience more convenient, educational and enjoyable.
According to an Oracle study released in December 2011, the leading reason U.S. and Canadian consumers visit a store is to see a product before they buy it (75 percent). Forty-four percent said they visit a store when they need the product right away, and 41 percent said they will go to a store to avoid shipping charges. These statistics demonstrate that, despite the proliferation of e-commerce, the retail experience remains an integral part of the purchasing process.
Beyond the showroom
While showrooming, where consumers visit a retail store to view a product and then make the purchase online, will continue; tests recently conducted by the National Retail Hardware Association showed that digital signage can be used to provide customers with the information they need to justify the retail purchase. Tests conducted at a retail chain in the Northeast U.S. showed that highlighting a range of products with digital signage consistently produced a major sales uplift for the highlighted products (Source: Aubuchon Hardware).
One way retailers can convert showroomers into paying customers is by capitalizing on the effective use of digital signage to provide customers with the information they need to justify the retail purchase. A successful display engages the customer, educates, and makes it convenient and even cost-effective to buy on the spot.
Proven sales uplift with digital signage
One of our customers, Aubuchon Hardware, a large hardware chain with 130 stores in the Northeast, recently participated in research conducted by the North American Retail Hardware Association (NRHA) to measure the sales increase at stores using digital signage to promote a product vs. stores that did not.
For the test, Aubuchon placed endcap digital signage displays in six stores, and then compared sales results to six other stores that historically had similar sales for the product tested. Each digital endcap presentation ran for one month.
Instead of focusing solely on price and savings, as is common with many static endcap signs, the displays also focused on educating shoppers about the benefits of using the product in their homes. Shoppers who wanted more information on the product could press a button located on the display and play a short, project-oriented how-to video.
The results demonstrate that product sales increase when interactive digital signage is used.
|Products||Units sold increase||$ Sales increase|
|Smoke detector||44.8 percent||37.5 percent|
|Air filters||178.1 percent||175.0 percent|
|Interior paint||23.0 percent||17.0 percent|
|Source: NRHA and Aubuchon Hardware|
Interactive prize-redeeming kiosk
One of our partners uses digital signage technology to present an in-store kiosk featuring its interactive "Prize Wheel" application. The kiosk is part of a complete marketing/promotional program that includes direct mail to provide customers with a mail piece that includes a barcode for redeeming a prize. When the customer scans the mail piece's barcode at the in-store kiosk, the player initiates the spinning of the animated video prize wheel that lands on a prize or a store discount for that customer. Designed to increase store traffic and brand/product awareness while making promotions fun for consumers, the application lets the retailer set the odds as well as the types and quantity of prizes or coupons.
Breath of fresh air
Digital signage trials at retail have consistently shown that customers not only found them eye-catching, they produced measurable sales increases. Even signage highlighting air filters showed that moving graphics and streaming video delivered sales increases of up to 178 percent (Source: Aubuchon Hardware).
SKU-activated merchandising applications
Another partner used digital signage to provide an innovative footwear manufacturer with an in-store interactive kiosk that uses Radio Frequency Identification and touchscreen interactivity to showcase the many pro-body benefits of the footwear. With the display, when a customer picks up an RFID-tagged shoe, the signage controller initiates playback of a video describing the footwear. Customers can also use the interactive touchscreen to select a shoe model and learn more, such as what celebrities are wearing them and other news coverage that highlights the specific model of shoe they're interested in. This level of interactivity and customization delivers a personalized shopping experience that greatly increases the rate of conversion.
Seize the day
There's no denying that showrooming is on the rise. That said, retailers now have innovative new tools at their disposal to enhance the in-store shopping experience and offer a level of interaction that simply can't be replicated by e-commerce. Retailers must boldly embrace these new tools to succeed in the ever-changing consumer marketplace. It's our opinion that as e-commerce matures, the door opens for a retail resurgence driven by forward-thinking retailers willing to invest in the technology necessary to expose customers to a more informative and interactive shopping experience.
Hastings is the CEO of Los Gatos, Calif.-based BrightSign, a supplier of solid-state, full-HD digital signage and kiosk controllers for the commercial digital signage market worldwide.
Read more about retail digital signage.