To beat ‘show-rooming’ effect retailers should consider becoming a showroom… sounds oxymoronic right?
But it is one of the numerous diversified strategies retailers can adopt to actually beat the ‘show-rooming’ effect (one where consumers visit physical retail stores only to purchase elsewhere online)
We now know that product & in-person interactions are one of the best trump cards brick & mortar Retailers have over their ‘e-commerce only’ counterparts… thus, it is imperative for retailers to educate their staff members to understand & leverage this benefit to it’s fullest extent
5 Showroom Scenarios
Scenarios outlined below are centered around this physical interactivity trump card (experiential retailing) that could predominantly benefit the consumer discretionary retail sector
1. Interactive Showroom
- Format suited – Flagship / Large / Medium
- Value Proposition –
- Rather than being a ‘Static’ showroom with products scattered across the store; adding an interactive dimension allows for dynamic consumers engagement no e-Channel can provide
- Allow consumers to participate in the immersive in-store experience, for example…
- Having impromptu ‘fashion shows’ with social dimension that regular consumers can take part in… not just designated models
- Dedicating special ‘Canvas Zones’ where consumers could ‘design their own room’ using exclusive & select furniture pieces
- Key Benefit – In most cases, consumer’s positive interaction would translate into an impromptu sale – either in-store or via the Retailer’s e-Store channels
- Key Challenge –
- Complementing the marketing calendar with fresh impromptu ideas borrowed from ‘now trending’ themes locally, on social media, etc.
- Tight Integration of ‘showroom experience’ with x-Channel ‘purchase experience’ such as pricing consistency, SKU count, etc.
2. Rent-a-Showroom
- Format suited – Flagship / Large
- Value Proposition –
- Vendor Zones – Regardless of how creatively that 4K OLED TV is described online, vendors still prefer consumers to experience it in-person. Big National Retailer’s could sub-lease ‘Showroom zones’ within their footprint to facilitate vendors-consumer interactions
- Startup Symbiosis – Many startups are increasingly engaged in launching innovative products. They would benefit from sub-leasing dedicated ‘Showroom zones’ within the big Retailer’s footprint to promote their solutions & build customer relationships at an early stage
- Key Benefit – Generate higher foot traffic into store leading to increased X-Sell potential. Revenue-share / Sub-lease revenue models from Vendors & Startups alike
- Challenge – Partnering with current ‘trending’ entities who complement the Retailer’s overall strategic direction, values, ethos, product range rather than diluting the core brand image
3. Personalized Showroom
- Format suited – Flagship / Large / Medium / Small
- Value – Ability for consumers to personalize their purchase in the same transaction on select products (clothing & accessories, smartphones, etc.)
- Key Benefit – In-Store customization extends the feeling of instant gratification to consumers that could boost satisfaction & NPS scores in addition to incremental ‘personalization revenue’ generated
- Challenge – Accurate forecasting of ‘Customized materials’ store inventory & wait times; both of which could lead to negative consumer experience if mismanaged
4. Pop-a-Showroom
- Format suited – Pop-up
- Value –
- Theme based Pop-up showroom that focuses on providing consumers with a unique specialized experience (e.g. Winter land, Smart Kitchen, etc.)
- Pop-ups also serve as a ‘Concept Car’ of the retail world where marketers could ‘test new products’
- Key Benefit – Engage audience in high foot traffic areas without bearing prolonged high costs of setting up a permanent store. Potential revenue stream from entities who would like to market their products within the Retailer’s Pop-up setup
- Challenge –
- Pop-ups could cost a pretty penny depending on the location and the time of the year and as such would need to be planned to have maximum impact / $
- Deep integration with Retailer’s other channels for Sales component. For example placing a tablet ordering screen against the displayed items facilitates instant purchase from Retailer’s e-Channel OR pick-up from nearest store
5. Showroom for Community / Charity / Swap Meets
- Format suited – Large
- Value – Retailers could dedicate a portion of their ‘floor space’ within their larger retail store to facilitate local swap meets & charities. Such community centric events would help preserve local community commerce & ethos
- Key Benefit – Attracting broader consumer segment (think sub-segment of millennials) and building brand around local community ethos
- Challenge – Aligning with the right local events that trigger a positive response whilst complementing the Retailer’s overall strategic direction & brand
Tight Integration
Immersive showroom experience is an integral part of an overall retail transformation strategy… especially one that tightly integrates distribution, warehousing, delivery, inventory control, sourcing, product management, channel management, IT systems, commerce systems, marketing, social integration, CRM and most importantly… setting team member expectations (Commissions vs. Customer satisfaction)
Lets explore one such cause & effect of Showroom on Warehousing
Mini-DC: Reformatting a large format store into an experience zone could free up additional space for a localized Mini Distribution Center
For a National Retailer that could mean an increase in distribution & warehouse footprint leading to agile customer delivery & inventory management – Facilitate smart stocking, customer pickups and same day delivery of select products; sometimes event besting their e-Commerce only counterparts
Alternatively the Retailer could choose to sub-lease this additional prime warehousing real estate to certain partners for a fee, thus potentially converting floor space into a revenue generating source
Retail industry is undergoing a dynamic transformation and as such is here to stay in the long run
How retailers broadly adapt, innovate, engage & utilize tools at their disposal will determine their success in the long run