Just about everyone has a Smartphone these days, so if you catch someone busily tapping away on a tiny screen while window shopping then you mightn’t think too much of it. However, if you’re a mobile retailer you might have reason to be a little concerned.
Statistics show that more and more people are going into shops to check out goods before buying them online elsewhere using their smartphone – sometimes while still in the store. The phenomenon has become so pervasive, it’s now known as ‘showrooming’. Worryingly for mobile retailers, there are apps available to help ‘showroomers’ in their quest to bag a bargain, such as the one that allows users to take a picture of a product in a store and find the same product cheaper online.
Mobile retailers can’t afford to ignore the market
Mobile retail is becoming big business. Yet it’s still only in its early stages. In the UK, currently the biggest mobile retail market in the world per capita, it’s thought that one in ten of every sale is made on a mobile device. 60% of UK consumers make at least one mobile purchase every month. Total mobile device sales are expected to hit £88.87 billion this year, £10 billion more than last year, up a similar amount from the year before that.
Moreover, the conversion rate for mobile sales has doubled in a year. The IMRG, the leading online retail association in the UK, reports that, in the 2nd quarter of 2013, 23.2% of online sales were made through a mobile device. Clearly, if you’re not in the mobile retail market, you’re losing out.
That hasn’t stopped some mobile retailers from trying to stop the flow of the tide. Adopting policies, such as the one introduced by an Australian health store, to charge customers a $5 ‘browsing’ fee for entering the shop (albeit redeemable at the checkout) is only going to force customers away.
Embracing mobile pays dividends
‘Showrooming’ isn’t going away. If shoppers are going to buy online when they visit your store, try to make sure they’re buying from you, says Terry Duddy, Chief Executive of Argos parent Home Retail. Argos recently introduced Wi-Fi into their stores to help shoppers make that choice. By doing so, the firm is able to take some control back:
“We’re cool with that [‘showrooming’]. There’s going to have to be improved transparency. What’s the point of stopping them when they can look before they come into a store?”
That said, Argos is already a multichannel store. Internet orders, including online reservations for collection, grew from 10% to 42% of all sales last year. Building a mobile element into business strategy is working, commented managing director, John Walden:
“We are better positioned than virtually anybody we can think of to win in a digital future.”
To emphasize the point, Argos has hired former Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) executive, Joanne Savage, to head up the Argos’ own brand label:
“A good own brand is a reason for people to come back to you,” added Walden.
Mobile retailers: Small companies can win too
Smaller mobile retailers can benefit too, says Ian O’Meara of Viking Marine, a sailing equipment shop in Dun Laorghaire, Ireland. Brick and mortar retailers have unique advantages they can leverage in combination with a mobile retail strategy:
“To compete with ‘showrooming’, you have to have well-trained, friendly staff. Knowing the answers to a shopper’s questions is still by far the best way to get waiverers over the line.”
O’Meara secured €10,000 in funding to develop his own web strategy. Although just 5% of Viking Marine’s sales are made online in present, this is an area Ian sees growing in the future.
Success, says Sheila Buckley, head of eTail Excellence Ireland, the online division of Retail Excellence Ireland, depends on how you tailor your online offering:
“It is up the retailer to ensure they have all the relevant content a customer is looking for online.”
Once online in-store, it’s easier to make customers aware of special offers or suggest they download an app to help with their shopping. One area where this is catching on fastest is in the restaurant and fast food sectors. In two of the most competitive markets out there, offering regular customers an app for special offers, menus and easy ordering keeps them coming back for seconds.
‘Webrooming’ – ‘showrooming’ in reverse
Of course, there are still advantages to be had for customers in a brick and mortar store. Urgent purchases are available immediately and there is no waiting around for a delivery or the costs associated with that, which can wipe out any savings made online. Buying online can make returns difficult too.
Which is where ‘webrooming’ comes into play. Many customers will check out products online and purchase them in a physical store. Clothing, especially footwear, is one sector where this happens frequently. Many customers don’t want to buy without trying something on for size. Retailers can take advantage of this phenomenon with a mobile strategy too.
The online market is still expanding fast and is expected to quadruple by 2017. Most of this growth will come in mobile retail. Savvy stock pickers will be taking note of companies investing in mobile, because mobile retailers that don’t will see their market share go to those that do.