We've all heard about the struggle which retail stores are facing in Australia as a result of having to compete with online retailers. It's a simple fact that online retailers are able to price their products cheaper than physical retailers simply because they have a lower costs base. Some retailers, like Gerry Harvey, the chairman of Harvey Norman, has insisted that tariffs on imported online goods should be introduced. Meaning, that we reduce the consumer's ability to get a much cheaper deal online, thereby making the domestic physical in-store purchase more appealing. I'd like to see the reaction of consumers if that went through.
Everything is digital; it is up to retailers to adapt to this change and recognize how it can compete using digital marketing. Many stores now have their own online outlets along with their physical stores. There are perks to buying online and there are perks to buying in store. On one hand you have convenience of shopping at home and saving a lot of money and on the other hand you have the comfort of trying or testing products before you purchase them to make sure they're exactly what you want. So what happens if a consumer wants both of these? Well, they go in store and try the product they're interested in and then they go home and purchase it online from a different retailer at a reduced price, this is called "showrooming" and it has become a problem for retailers.
I admit that I am guilty of showrooming. Last year I made the decision that I wanted fresh new Nikes, so I went online and had a browse around and I eventually found the style of shoe and colour I wanted. However, for me, I have to try runners on before I buy them. So I went into the city and walked into a store which specialized in sports shoes and found the pair I was interested in and tried them on. They felt great and I decided I'd buy them, the only problem was the price in store was $240. Nope, sorry, instead I went back online to EastBay.com, the website which I used to help find the shoe I was looking for and paid $160 for the same pair which included delivery. That's a massive saving. So much so that now, I will always look online before buying runners.
It made me think; do digital marketers have an unfair advantage over physical in store marketers simply because of the platform, budgets and the digital reach they have to add value for consumers? Or could stores fight back and offer a better in-store experience, return policies, stock exclusive items or run online campaigns too? Well, there is also the reverse trend with "webrooming" where people browse online and then buy in store though generally this is a natural purchase decision process from the same stores website. Either way, brick and mortar stores need to become more savvy with marketing, especially their digital marketing as this is the direct competition to the online stores.
Have you ever "showroomed" or do you know of a way that companies have competed with this?