When a Customer Shops With You, but Buys Elsewhere
Anyone who sells to consumers--or buys anything themselves--can't help but notice how dramatically smart phones and tablets have changed consumer behavior and shopping preferences.
One example is showrooming, a term used to describe customers who look at a product in a store and then buy it online. Another is webrooming, which is when customers look at a product online and then buy it at a local store.
The problem, for entrepreneurs, is that sometimes customers may look at a product on your website and then buy it at a local store, or, browse your expensive brick-and-mortar shop and then order that same product through a competitor's web site. Nowadays, all retailers run the risk of becoming the window shopping display of their competitors, as discerning customers perform their due diligence before making a purchase.
Surprisingly, all this comparison is not just about price. Customers look at a variety of factors when deciding who to buy from. Here are a few tips to keep showrooming or webrooming from affecting you negatively:
1. Price-watch your competitors' and manufacturers' sites
Don't let your customers feel short-changed with your prices. It may not be all about cost, but it's hard to expect great levels of loyalty if your prices are not competitive. This becomes more difficult as manufacturers start using e-commerce to sell directly to customers, and sometimes compete unfairly with lower pricing.
The important thing to remember is that wholesale is a big and profitable business for manufacturers. Make that crystal clear to your big-ticket manufacturers: You don't get paid for being their window display, and most importantly, you can always buy from and market their competitors' brands, an idea they usually hate. If they have a monopoly in the market, then maybe you should be competing with them on the manufacturing side.
2. Buy more selectively
You may not need to continue working with a manufacturer that provides you with only a few styles. Aside from taking up prime real estate in your shop or online store, they may also be luring your customers with a wider selection on their own site. Perhaps that brand needs to be dropped, or your selection needs to broaden strategically.
3. Service trumps cost. Use this as your mantra
Service is king. The convenience and ease with which a customer can do business is the prime factor influencing where he or she will buy. Seduce your customers with outstanding service, fast shipping, and strategic branding, and they will be loyal to you.
Obviously, there are limits. If there's a $100 difference on a $200 item, you're not going to be able to make it up with great service. But if you're charging $10 or $20 more on a $200 item, it shouldn't be an issue if you have something your competitors don't--consumer trust.
In my experience, manufacturers' e-commerce sites rarely compare to those of experienced retailers when it comes to customer service and fast turnaround. Use that in your favor, and ask manufacturers to compete fairly on price.
4. Ink exclusivity agreements
Another good option is to negotiate exclusivity agreements on a group of styles or new season picks. Not just other retailers, but manufacturers themselves will be restricted from selling styles that were made exclusively for you, and you may be able to use this differentiation to level the playing field a bit.
It is getting harder and harder to compete in this global retail world. It's survival of the fittest for online and the retail stores at large. So up your game. Show them what you're made of. Win.