March 27, 2017 How to Combat Showrooming in Retail with Image Recognition
Showrooming and webrooming are both big consumer trends that are changing the retail landscape, as alternative channels of purchase proliferate. The first one refers to checking out a product in-store and then buying it online, such as on eCommerce sites like Amazon, for a better price. The latter is the opposite; it’s about researching products online and then heading to a store to complete the purchase.
According to a Harris poll, 46% engage in showrooming. That means that almost half of in-store visitors leave the premises without buying on the spot. That is a huge revenue loss for both online and offline retail sectors.
Reasons for showrooming
Showrooming has become more prevalent due to the proliferation of smartphone users, of course. With 83% of people using their phones inside stores, it becomes quick, easy and convenient to check for reviews and price comparisons when making a purchase decision, instead of buying them at the cashier right away.
An Econsultancy survey revealed that some of the main reasons for people to do showrooming are:
- Lower price from the online retailer (69%)
- Preference for online shopping (27%)
- Product out-of-stock in store (21%)
Although some retailers are now adapting their practices to the changing environment by going omnichannel and enhancing their in-store experiences, it is still a threat to their sales volumes and profit margins.
However, they can harness showrooming and combat its effects by perfecting these fundamental practices:
1. Omnichannel is essential
To avoid losing customers to online retailers, it’s crucial to expand beyond physical stores. Having multiple retail channels including web, social, mobile and physical should be the indispensable for most businesses, since today’s customers are less likely to complete all the stages of the path-to-purchase through just one channel.
The more seamless the transition is between the online and offline world, the smoother the shopping experience will be. Thanks to technology, this can be easily achieved with “scan-to-shop” mobile experiences, which can also enable the next points in this list.
The German brand mymuesli, for example, offers a multichannel shopping experience that integrates Image Recognition technology. Customers just need to open the app and scan the graphic icons printed on PoS materials in the stores, outdoor media or even product packaging, and create their own muesli mix, which can be purchased straight away.
2. Personalize your mobile strategy
A mobile marketing study by Vibes found that 89% of people would sign up for mobile messaging if it was personalized. However, only 18% said they frequently see customized messages from brands and retailers.
Customers don’t believe in the ‘one size fits all’ anymore. In fact, a whopping 86% of consumers say personalization influences their purchasing decisions, and 53% think it is important for retailers to recognize users in all the channels available. From behavioural emails to push notifications or personal discounts, it is essential to talk to each customer individually. Retailers must offer cross-channel personalization in order to combat showrooming.
The results of a recent Rich Relevance survey revealed some interesting insights:
- 52% are open to receiving pop up offers on their mobile device, triggered when they enter a store
- 43% would like to receive a digital coupon for a product they looked at but didn’t buy after leaving the store
Mobile apps can help drive sales by engaging with the customer through personal experiences such as providing special promotions or recommendations based on buying behavior. It also allows retailers to collect customer data that can be used to further enhance the experience.
The beauty retailer, Sephora, has become the king of omnichannel personalization. The Sephora to Go mobile app is centered around providing shoppers with a mobile experience that is tailored to their needs. It offers exclusive in-app promotions; a virtual try-on feature; inspiring content, tips and tutorials; push notifications for targeted messages; and lets users scan products to access more information while keeping record of scanned items and past purchases.
Other brands such as L’Oreal or Benefit Cosmetics are also introducing Augmented Reality for virtual try-on features to their apps. As the VP of Sephora’s Innovation Lab assures, it helps boost the customer’s confidence when they know how to use it or have extra information about the product. When executed properly, it can be a key element in the path to purchase decision.
3. Build engaging in-store experiences
Today’s millennial customers are all about the experience. It’s important not to ignore this and create engaging, tangible in-store encounters.
For example, 62% of shoppers want to be able to scan a product on their device to see product reviews and recommendations for other items they may like, as the previously referenced RichRelevance study suggested.
Image Recognition enables engaging retail experiences, which can be used to create meaningful connections between brand and shopper, as it makes the whole journey interactive and exciting. Retailers can integrate it in their mobile or digital experiences to drive users towards games, giveaways or contests, as well as serving as a digital in-store assistant.
It has become a key strategy to combat showrooming. A study by Interactions Consumer Experience Marketing showed that only 34% of shoppers use Augmented Reality now, but 71% of them said they would shop at retailers more often if they have it, and 61% prefer to shop at stores with AR than at those without it.
Nike, for instance, unveiled an AR experience that is only available in their Parisian store in Champs-Élysées. It consists in an augmented video-mapping device that projects custom designs onto sneakers in real-time, so shoppers can design their sneakers, place a white shoe on the device and visualize their choice of colors and illustrations on the shoe.
4. Be useful
When introducing AR experiences, it can be easy to get carried away by its gimmicky aspect. Retailers can use this tech as a useful shopping companion, enhancing customer experience by facilitating price comparisons, access to extra information, ratings and recommendations.
Augmented Reality can have many uses, but according to Interactions Consumer Experience Marketing,:
- 71% want to use it to visualize product differences, such as color or style,
- 65% want to get product information
- 41% would choose to use it to find out about deals and special promotions.
UK’s biggest retailer, Tesco, developed an AR app called Tesco Discover in order to push mobile engagement up and invite customers to ‘discover more’. It encourages shoppers to scan product labels, magazines and in-store POS to unlock information about the product, interact with editorial features, engage with experiences in-store, and ultimately purchase from the app.