Showrooming is the art of visiting a brick and mortar retail shops with the aim of examining goods then later purchasing those goods online. Essentially brick and mortar stores only serve as showrooms where online shoppers come to examine products physically. Before they buy products online, customers first visit shops to talk to shop attendants and feel the products. Showrooming remains one of the biggest problems facing traditional brick and mortar stores like Best Buy in recent times. Motivated by the need to get products at the lowest possible prices, more customers are now visiting traditional shops to personally examine products, only to end up shopping for these products online. The emergence of showrooming as a modern shopping trend has forced retailers to come up with strategies that will motivate customers to buy goods from their stores instead of purchasing such products online.
A study conducted by Harris Interactive revealed that 40 percent of consumers in the United States have a history of showrooming. The most affected companies are big-box retailers like Wal-Mart, Best Buy, and Target. However, the biggest beneficiary of showrooming is Amazon as most of the customers make their showrooming purchases at Amazon online stores. This paper explains the practice of showrooming and the impact this practice has on retailers like Best Buy.
The heavy use of smartphones and advances in technology has contributed to the emergence of showrooming. The tech-savvy nature of modern consumers means that they can easily find products they desire to buy at lower prices, at any time. Consumers can now use their phones to compares prices and products across different traditional and online stores. This practice of investigating products in conventional retail outlets then moving online to do real shopping has had a significant impact on consumer electronics retailers like Best Buy. Best Buy has faced several issues in recent times like the fall of prices for electronics. However, the biggest threat facing the electronics retailer is the showrooming effect. In the year 2012 best buy announced that it was closing down 50 of its retail stores across the nation to focus on technology. The company CEO, Brian Dunn thereafter declared that he was stepping down his position as the Chief Executive Officer of the company. Dwindling sales prompted the move by the company to close down most of the stores. Showrooming has led to the emergence of price matching across the market. For instance, Best Buy has to compare its prices with those of online competitors like Amazon. Given that most of the retail stores operate in areas where the property values are so high, setting prices at the same levels as online stores like Amazon often leads to losses. Online stores, on the other hand, incur fewer overheads cost n their operations and can thereby offer massive discounts on their products without suffering a loss in profits. While it is true that prices on online stores are often lower than in physical stores, product price is not the only aspect of marketing. Companies can leverage on other areas like better customer experience to remain competitive in the current retail market.
To keep companies competitive in this era of showrooming companies should implement certain marketing strategies. One of the strategies that can keep Best Buy competitive amid sustained pressure from showrooming is to give consumers the option of purchasing electronic products online than physically collect them from their Brick and Mortar stores. This practice of allowing customers to purchase goods online then collecting from stores eliminates the shipping costs that online stores normally charge their customers. The practice will reduce the price of goods and help attract more customers in retail stores.
Stocking different products
Stocking a wide variety of products is a sure way of remaining in competition with other companies. This practice gives consumers so many options in terms of products. As such, consumers will get attracted to retail stores if they realize that some of the products they offer cannot be found online. The company can also specialize in other areas like offering grocery stores, movies, and coffee shops. Providing other services and products can appeal to customers who may be thinking of shopping for products online.
Offer good customer services.
To succeed in beating the competition and staying on the market Best Buy must put the needs of its customers above any other need. The company must first research what consumers need and come up with methods to meet their expectations. One of the reasons why people prefer buying their products online is because they can find more information and reviews about a particular product online. Making sure that the company has knowledgeable customer care professionals in all retail stores ready to offer more information about products offered in stores can help the company fight off competition from online competitors like Amazon. To remain afloat in the modern retail market, Best Buy must train its staff on good customer practices. The company can also provide extended warranties on all electronic products purchased.
Utilizing a company website and social media to make the sale
Best Buy can utilize the company website to market products. Through the website, consumers can order and pay for the products. Thereafter, the company can offer attractive services like free shipping. The company can also leverage on social networking sites such as Facebook to market its goods and expand its online presence in this digital age. Marketing products on company websites and social media sites increase interaction between the company and customers. The company can create products description on its website and social media pages and also include helpful and clear pictures of products. Conducting market and consumer research on which products are mostly purchased online can help the company to focus more on such products rather than focusing on every product.
In this era of information and technology, the internet and smartphones continue to offer customers price opportunities across the nation. Consumers can now check product prices in traditional stores then use their phones to compare prices of similar goods online. Traditional brick and mortar stores like Best Buy continue to feel the pinch of this new marketing trend. However, there are strategies that companies such as Best Buy can use to fight off competition from online retail giants like Amazon. These techniques include offering better customer service experience and giving customers the option of buying online and then picking the goods from the physical stores. Best must also avoid losing consumers to online retail giants like Amazon by expanding their operations beyond the traditional retail stores. This involves moving business operations to digital retail platforms like websites and social networking sites.