In December Amazon.com created quite the ruckus within the retail industry when it actually provided a discount to customers for "showrooming" -- where customers enter a store, investigate an item they see in the store on their phone, and leave without making a purchase. Retailers and retail organizations accused Amazon of preying on small, independent retail stores that can't compete with the online retailers' prices.
Exceptions aside, it's unrealistic for most small retail shops to expect to compete with online retailers on price. Additionally, moving forward, retailers' success will be dependent not on how they can compete against the Amazons of the world, but how they can create a service and experience that is incapable of being recreated online.
There are three ways that retailers can do this:
(1) Rework the store to focus on education and entertainment -- Here, the store should focus on how to create an environment that cannot be duplicated online--an experience that is fun for the entire family and where customers can interact with the products and the store brand.
(2) Rework store layout, inventory and signage -- Carry the correct combination of products and have a clear, effective store layout. This is more important today than it's ever been before. Having the ideal product mix--at multiple price points--can help stores shrink their real estate and become more cost effective.
(3) Focus on consultative sales with likable associates -- Customers can find product information, pricing and reviews on the Web. In the store, offer them something different--something to supplement the information found on the Web. The store and its associates can fill in the gaps by offering an expert's opinion, one that's genuine and and the customer can relate to. The associate that is likable and honest will encourage customers to return with future inquiries.
Technology won't save retailers from the Amazon's of today and in the future, but it can help retailers better manage their businesses. When researching and investing in new point of sale and retail software solutions, retailers should focus on solutions with customer relationship management, inventory reporting, integrated e-commerce, advanced employee/labor management, and business intelligence (BI) functionality.
These technologies, however, are not in and of themselves solutions to many retailers' problems today, and these strategies are just the beginning to thinking how the store can better serve its customers and eliminate the act of "showrooming." The effort goes beyond the store--into the marketing channels, online experience and the brand image itself. Focusing on differentiation can help the store become a magical, memorable place once again.
Michael Koploy is an ERP Analyst for Software Advice--a website that provides reviews of point of sale software solutions. He can be reached directly at [email protected].
