High street retailers battling against online shoppers should make full use of loyalty programmes, writes Annich McIntosh
There have been many complaints from retailers in recent times about the practice of “showrooming” – consumers checking out goods on the high street and then buying them online at a lower price.
As shopping centres emptied, shopkeepers blamed this practice for cutting their turnover and making it impossible to maintain a bricks-and-mortar presence.
But a recent report from loyalty company Aimia argues that showroomers are among the high street’s best customers and should be embraced rather than hated. What is at fault, they argue, is the practice of some retailers to separate their online and high street businesses in a way that makes it impossible for consumers to “shop and click” or alternatively “click and shop”. In instances where retailers have merged their two divisions, such as Apple and John Lewis, the benefits are enormous.
According to Aimia’s Millennial survey, retail showroomers aren’t just cherry-picking deal-hounds ruthlessly exploiting bricks-and-mortar retailers to line Amazon’s pockets. They are potentially your best customers; they indicate a greater willingness to respond to rewards and offer relevance with increased loyalty. In many ways, they’re your ideal customers: highly engaged, fluent with technology and focused on extracting the most value from their brand relationships. And most importantly, they’re buyers.
Showroomers are among the high street’s best customers and should be embraced rather than hated
It is understandable why bricks-and-mortar retailers got upset about showrooming. Amazon has built a massive business around the principle of best buy. But there are steps retailers can take to benefit from these difficult showroomers and loyalty, says Aimia, is one of the best tools available.
The study says: “The solution to combating showrooming may lie in the classic loyalty management activities of using shopper data to extract consumer insight and delivering recognition and reward to drive in-store purchases. Indeed, loyalty management may provide unparalleled insight that helps retailers reinvent retail.”
About 20 per cent of consumers are showroomers in the three markets that Aimia surveyed, which were the UK, United States and Canada. They are young, mostly aged 19 to 29, disproportionately male and they are digital aficionados. But the most interesting characteristic of all is they are more loyal.
“Punishing customers for showrooming or trying to find technology that makes showrooming impossible is often a retailer’s first response to combating the activity,” says the Aimia report.
“Best Buy, for example, has tried replacing standard bar codes with proprietary codes that can’t be scanned by mobile price-comparison apps – never mind that smartphones are also web browsers and a Google search will find a comparison price just as quickly. Other retailers have explored using lasers to thwart scanners, disconnecting wi-fi signals and blocking cellular transmissions.”
Instead, it would be so much easier and more effective to follow the example of Apple that uses its physical stores to foster customer loyalty that most retailers would give their right arm for. They have done it by making the stores places that consumers actually want to visit, regardless of whether they can buy the product cheaper elsewhere.
And remember, showroomers are more likely to participate in reward programmes, they are particularly open to offers and coupons, they will trade personal details for rewards, and they prove to be more loyal.