Lessons in Service Design: How to Avoid “Showrooming”

Retailers have noticed a disturbing trend of the past few months. Many of the people visiting their stores are browsing but not spending any money… At least, not at your store. They’re still spending their money… just online. These customers go to shops and then whip out thier smart phones to find cheaper prices for items they discover there. The nickname for this behavior is “showrooming,” where the store is a place for picking out items… just not for buying them.

This has become an especially painful phenomenon for booksellers, made worse when online retailer Amazon added a barcode scanner to thier mobile app last fall. This addition, combined with one-click checkout, zero sales tax and low shipping prices (or, in the case of Amazon Prime customers, free shipping), made it almost effortless for customers to save money and order items from Amazon and not the bookstore. A recent study stated that 4 out of 10 Amazon customers have browsed retailers to look at an item before buying it from Amazon. It’s not just books, either – Best Buy is seeing the same phenomenon for consumer electronics, and even the big box retailers such as Target and Wal-Mart are seeing customers comparison shop with thier mobile phones.

This is not just a problem for retailers – it’s also an problem websites have long faced, where the offerings or products sold there that can easily and quickly be compared with others at the click of the mouse. So, whether you sell a physical good or software, have a store or a storefront, here’s some ways you can avoid “showrooming” and keep

Technology doesn’t care. Don’t complain about “showrooming”, it is not going away. The technology will, if anything, be more and more ubiquitous in the years to come. Man up and realize that you can’t change this.

Empasize the “now” and “quick checkout”. No matter what your “storefront” is, emphasize the fact that you can get the item RIGHT NOW, and with no waiting. Make sure your “checkout” process is streamlined and quick (which means if you own a retail store you have enough staff on hand to ensure purchases are quick and with no waiting).

Reward loyalty, forever. The whole idea of a “loyalty program” is so simple we forget how effective it is: Reward repeat customers. Get a free coffee or donut with your nth purchase. Get free perks like no bag fees and free upgrades. Get faster “check-ins.” And so on. It costs a lot more to aquire a new customer than to retain an old one. Loyalty programs not only help retain customers, but also influence behavior in many individuals (paying more to retain earned “status,” for example). And once you set up a loyalty program, never take perks away… you’ll upset the most loyal customers by doing so.

Focus on what you are really “selling.” I did a large research project many years ago for a cellular phone company who was looking to roll out a new point of sale system in their stores. I went to several of these stores to study the inetractions customers had with people who came in the stores, and quickly found out that stores weren’t selling phones at all – they were customer support centers, and what they really needed was a better designed account lookup program and knowledge base. You may be trying to sell the wrong thing… Case in point: staff at Apple stores don’t really “sell” thier computers or ipods, they are trained to solve customer problems… and that often ends up in a sale.