Commentary: The showrooming myth
By William Trew Merrick, SOLOMO Technology
A red herring, according to Oxford, is a "fallacy that misleads or detracts from the actual issue." Typically, red herrings are used to lead people toward a false conclusion. I believe that describes the phenomenon of showrooming, as it is used to talk about what's going on in retail. The false conclusion is, "The sky is falling, and you need our technology to hold it up." To be clear, I work in a company that benefits from the attention that this red herring is generating around our industry. That doesn't mean I'm going to support what I believe to be a non-issue.
The showrooming phenomenon
For those of you who aren't familiar, showrooming is a natural behavior that is arising everywhere people have a smartphone and are in a store. They look at the price tag of an item on the shelf, and then look it up on their phone. I bet some people even feel a little guilty, like they're cheating on the store — most likely if it's a small, independent retailer, but I digress.
The point is, people are price checking. Is comparison shopping new? It isn't, but mobile technology is — smartphone penetration is just over 50 percent, online retail sales have passed 5 percent and are rising, and showrooming (price checking via a mobile device) is viewed by the mainstream as a threat.
The Sears Catalog
What the heck does that antiquated retail technology have to do with showrooming? It's simple:
Brick and mortar retail survived the Sears Catalog, and catalogs in general. Smartphones are just like catalogs, except you can carry every store's catalog in your pocket, all at once. Brick and mortar retail will survive the universal, electronic catalog as well. In fact, I believe they'll thrive off mobile — once they start playing the new game.
You might not know this, but the Catalog was once Sears' dominant sales platform. It took until 1931 for Sears' brick and mortar sales to surpass their catalog sales for the first time. You could attribute this to people moving to cities, making it more convenient to go into a store — but it's still more convenient to order from a catalog.
In fact, Sears saw their brick and mortar stores as so valuable that they built locations in reach of rural populations - who promptly set down their catalog and drove into the store. Guess what? They set down every one of Sears' competitors' catalogs as well — in favor of going into a store. Why? The store itself has value that neither a catalog, whether paper or electronic, can provide.
The more things change...
So, the point with the Sears Catalog can be seen as working against the takeover of online shopping — which is just one possible end point of showrooming. People could always go to another brick and mortar. As a retailer, where do you go from there? As it has always been with change, you've got to change with it. Smart retailers will get back to basics by focusing on where stores have always had value, what they should give up due to the change, and where new sources of value can be found. The false paradigm of showrooming will only distract retailers from the task at hand.
No change worth pursuing will come from “combatting” a natural behavior of customers. Remember this scene from Miracle on 34th Street?
In case you don't want to watch, the key point is twofold: First, the mother says to Santa, "I've been all over town and I can't find [the fire engine]" — even in 1947, comparison shopping was a natural thing to do. The only difference today is that you can browse the town while sipping a latté at the mall's food court. Second, Santa (working for Macy's), tells her where she can find the product she's looking for.
Is it a “back to the drawing board” kind of moment? Yes and no. The retail experience can become more convenient, enjoyable, and productive - for both the retailer and their customers. Some breakthroughs will come about due to pressures from technology. These changes will require some drawing-board thinking. Other changes will come from the enhancements from technology. These are less impactful on process; in fact, they should be tailored by companies to work their way into existing business practices.
If showrooming isn't real, what's the deal?
Even if showrooming were a real concern, it would still be a bad idea to fight it head-on. Customers cannot be seen as the enemy of the business. The idea that showrooming is something to be concerned about creates this false paradigm, and leads people to the false conclusion that the purpose of indoor location systems and social, mobile connectivity is to try to change consumer behavior. Businesses that go down that route will find themselves as the enemy of consumers, who will act on their belief that the business is trying to play a game with them instead of focusing on their needs and wants. You don't game your friends, and you don't game good business — you keep coming back because you value the relationship.
The real paradigm is that new technology is a constant force, and human nature is to seek the highest value. The real conclusion is that this new breed of social, local and mobile technology should be approached with a focus on bringing more value to the customer while improving business operations. The specifics of my thoughts on this will be laid out in an upcoming series on how Social, Local, and Mobile technology will change the retail landscape, and how the cutting edge innovators can ride the wave to its fullest. Stay tuned.
William Trew Merrick is Marketing Coordinator for SOLOMO Technology. (Photo by AZAdam.)