The impact of retail and its terminology is constantly changing. Two terms that retailers may have heard in recent years are “product showrooms” and “online shopping.” Product showrooms are a trend in shopping behavior where consumers visit stores to touch and try products but choose to buy them online. Online shopping is the opposite.
What is a Product Showroom?
A product showroom is the concept of having low or no inventory for purchase in your physical store. It turns your store into a display area.
In terms of shopper behavior, a product showroom can be defined as: “When a shopper visits a store to look at a product and then buys the product online… this happens because many people still prefer to see and touch the goods they are buying, but many products are available at lower prices through online sellers. Thus, local stores practically become showrooms for online shoppers.”
Product showrooms happen whether you like it or not. Instead of fighting it, this article will address ways to leverage this trend and benefit from modern shopping behavior.
What is Online Shopping?
Online shopping is the opposite of product showrooms.
“With product showrooms, retailers face the challenge of customers coming to the store to check out and test the products, then going home and completing the purchase online (often from a competitor),” says Dr. Gary Edwards, former head of customer service at Empathica in a 2013 interview. “Online shopping, on the other hand, is when consumers research products online before going to the store to evaluate and purchase the item.”
Online shopping grew significantly during the COVID-19 pandemic. Instead of spending time wandering in stores, consumers turned to the internet to conduct most of their product research. They then overcame shipping times and costs by picking up products in-store.
Benefits of Product Showrooms and Online Shopping
Less need for space
Product showrooms eliminate the need to technically display every product you sell, requiring less space for your store. This can help you save money on rent, store interior design, hiring a store layout expert, and other costs.
Moreover, the reduced retail space simplifies selection for consumers, removing the distraction caused by excessive choice, increasing in-store conversion rates, and helping customers feel more confident in their choices.
Enhanced customer relationships and loyalty
The product showroom model removes the pressure of immediate sales and allows retailers and sales teams to focus on building long-term relationships with customers. Employees become retail consultants instead of salespeople, providing assistance and personalized recommendations. In today’s highly competitive retail landscapes, this level of customer service builds stronger relationships and customer loyalty.
Elimination of shipping costs
Online shoppers dislike shipping costs. In fact, nearly 60% of online shoppers say free shipping would improve their online shopping experience. Additionally, 40% state that free returns and faster shipping would also enhance their experience.
However, shipping costs cannot always be avoided. In 2022, shipping costs will be anticipated to rise, which will inevitably be passed on to consumers.
Online shopping removes shipping costs from the equation. Customers get their products immediately.
Customers expect they will wait for shipping when shopping online, but nothing compares to the instant satisfaction that comes from buying something in-person. Online shopping gives customers the best of both worlds – the ability to shop from home while receiving the product immediately. It removes not only shipping costs but also the time required to wait.
Possibility
Advanced Selling
The opportunity for advanced selling and cross-selling of products is enabled by showcasing products and online shopping. When customers visit your store to check prices and search for a specific product, you have the chance to present them with other products they might be interested in. Some retailers place QR codes near items that provide information about related products.
Similarly, customers who are shopping online but visiting stores to complete their purchases may discover other products they love when they begin to browse. Point of sale displays at the checkout counter and around the store selling area are a great way to boost sales.
More Customer Data
Customers who visit and engage through product displays can provide valuable information that helps you better understand your audience.
“Brands should think of [product displays] as opening a new channel for customers to share their preferences – a strong and valuable signal to be combined with other consumer information for targeting,” says Eric Bosko, Chief Product Officer at Nielsen in a 2013 interview. “Smart brands should respect each customer’s choice to explore other options. And the truly smart brand should go further to leverage the signal and discover the profile of consumers who are viewing products (and what they are looking for), then target other venues with their ads.”
Of course, customers may be viewing your products to determine the best price for your item. However, you can still gather valuable information from these shoppers to improve your ads and secure their business next time.
Risks and Challenges of Product Displays and Online Shopping
Unless you adapt and embrace modern shopping behavior, your store will fall behind. Here are some suggestions on how to mitigate these risks.
Loss of Sales to Competitors
Customers are viewing products with the aim of discovering the best price for an item – perhaps elsewhere. As a result, you may lose sales to competitors, such as discount retailers or even thrift stores.
In the eyes of customers, this is just smart shopping. For retailers, however, it’s hard not to feel defeated. Instead of allowing product viewing to frustrate you, understand where your store is vulnerable.
Give customers a reason (other than low prices) to shop with you. Customers crave unique experiences and relationships as much as they crave discounts.
Incorrect Reporting or Inventory Numbers
Multichannel retail can make reporting and inventory management difficult. Customers who are shopping online and purchasing in-store (product viewing) or shopping in-store and purchasing online (online shopping) should have access to accurate inventory numbers.
Use a point of sale system that integrates seamlessly with your online store background. For example, the Shopify POS system connects to your Shopify store, allowing you to manage all your sales channels from Shopify’s management.
Consolidating your sales channels helps support product viewing and online shopping in multiple ways. For instance, inventory levels are updated when products are sold, returned, or exchanged online or in-store, so both customers and store employees know exactly how much inventory you have at all times. Most importantly, sales reports accurately attribute revenue to the correct sales channels, giving you a complete picture of how (and where) your customers prefer to discover and purchase products.
Trends in Product Display
While many shoppers are checking the prices of your products, they are also doing things like looking for additional information about the products.
Shoppers are conducting more research for certain high-value products, such as consumer electronics, portable products, and furniture.
Additionally,
Shoppers are more likely to purchase durable and non-perishable products online (such as books, electronics, and clothing) and buy consumable products in person (like groceries and medications). Because of this, certain retail categories are less likely to feature products or shopping online than others.
Retailers Using Product Showcases
Allbirds
Allbirds, a shoe company based on Shopify, started in 2016 through Kickstarter. In 2017, Allbirds began opening pop-up stores in San Francisco.
Since then, Allbirds has expanded to 23 locations in the United States and 12 global stores – all functioning as showrooms. From the beginning, the Allbirds team wanted their physical stores to be a brand experience, not just a shopping destination.
By using Shopify POS, Allbirds removed the need for fixed registers, allowing them to make better use of smaller retail spaces and provide a more interactive experience for customers. This technology also enabled Allbirds to offer in-store purchase technology and shipping to customers – what is called the “endless aisle.” When customers come searching for uncommon or unavailable products, Allbirds employees can process transactions, receive payments, and ship the item directly to the shopper.
Bonobos
Bonobos started as an online-only retailer for men’s clothing. However, in 2012, Bonobos began opening “Guideshops” (its version of product showcasing), understanding that some shoppers wanted to experience shopping in person. “We reinvented retail,” says the Bonobos website. “It’s completely personal, and we call it a Guideshop.”
In any of Bonobos’ 60+ shops, customers can walk in or schedule an appointment to shop in-store, have their purchases sent directly to their homes, and make free returns or exchanges – even for online purchases. The in-store experts educate shoppers about the Bonobos product range and help them find the perfect fit.
Clearly
Canadian eyewear and contact lens brand Clearly was launched in 2000 as a cheaper alternative to traditional optics. Since then, the brand has opened four showrooms in British Columbia, Toronto, and Calgary.
Why? Because buying glasses can be a physical process. Clearly’s showrooms allow local customers to meet with optometrists for eye exams and try on glasses.
Any purchases are shipped directly to customers’ homes, and the showrooms offer special discounts and services such as eyewear repairs, product exchanges, and free cleaning. Providing services in-store and online allows Clearly to reach customers of all kinds.
Glossier
Glossier conducts most of its beauty business online and through pop-up stores occasionally. However, the brand has permanent locations in Seattle, New York, and Los Angeles, soon to be in London, which serve as showrooms.
Here, visitors can try Glossier makeup and skincare products, speak with consultants and experts, purchase products in person, and have a personal experience with the Glossier brand. Best of all, each Glossier showroom reflects its location: for example, the Glossier showroom in Los Angeles gives customers a desert vibe.
Leveraging Product Showcases and Online Shopping
Transitioning to Multichannel
Encouraging a cohesive customer experience across multiple channels encourages shoppers to engage with your brand both online and offline.
While customers love to browse online, nearly half prefer to purchase in-store. Additionally, retailers with two sales channels generate more revenue than those with only one.
If you haven’t already, consider multichannel retailing. Whether you’re expanding to sell via an e-commerce site, social media, temporary showcase locations, or showrooms, build a multichannel strategy that works for your unique brand.
Engagement
customers through service and personal experiences
Human interaction remains a vital reason why customers still prefer to buy products in-store rather than online. Although the COVID-19 pandemic has radically changed the way we shop, some consumers prefer in-store shopping and are more likely to purchase when they receive assistance from knowledgeable staff.
Great service can go a long way in attracting and retaining customers. A blog post by Kissmetrics titled “The Fastest Way to Lose Customers” found that “71% of consumers have ended their relationship with a company due to poor customer service,” and that once these customers are lost, it costs an average of $243 to replace each one.
Retailers can leverage this data by enhancing and improving the interaction between store employees and customers. Make sure to train retail staff well on your products and best practices for customer service.
Additionally, make the return or exchange process easier (especially in-store). According to a study by Forrester Consulting on behalf of Shopify, 51% of consumers said that the ability to pay online and return items to a physical store has a significant or very large impact on their decision to purchase a product online. In response, 44% of brands stated that they plan to prioritize this.
Requesting Shopper Feedback
Customers are already on their mobile phones when in-store, so why not take advantage of that? Ask them to like your Facebook page, or take a picture with your products and use your hashtag on Instagram, or share their purchases on Twitter. Incentivize that through contests, giveaways, coupons, and other creative promotional campaigns.
You can also encourage customers to review their shopping experiences and your products. Studies show that 93% of customers read online reviews before buying a product, and customers are willing to spend 31% more on a brand that has excellent reviews. This underscores the importance of showcasing your customers’ opinions.
Turning Your Store into a Physical Showroom
More brands are adopting the trend of showcasing products in a crafted manner – opening product showrooms instead of traditional stores.
Across the globe, retailers (like the examples above) are opening showrooms to allow customers to touch and experience their products, which are then shipped directly to their homes. No more lugging around heavy shopping bags or worrying about in-store stock levels.
Offering In-Store Discounts
Historically, shopping online has been cheaper than shopping in-store – which is why product showcasing became a trend in the first place. Instead of resisting the trend, retailers should capitalize on product showcasing and drive traffic by offering in-store discounts or product bundling benefits.
Providing the Option to Buy Online and Pick Up In-Store
Buy Online, Pick Up In Store (BOPIS) has seen a surge during the COVID-19 pandemic and remains a popular trend in shopping. BOPIS allows customers to avoid shipping costs and wait times without having to browse shelves or find out-of-stock products.
Moreover, bringing customers into the store can prompt additional purchases once they see aisles and point-of-sale displays.
Examples of Retailers Using Product Showcasing
Allbirds
The shoe company Allbirds, which relies on Shopify, was started in 2016 via Kickstarter. In 2017, Allbirds began opening a pop-up store in San Francisco.
Since then, Allbirds has expanded to 23 locations in the United States and 12 international stores – all operating as showrooms. From the beginning, the Allbirds team wanted their physical stores to be a brand experience, not just a shopping place.
Using
Shopify POS has removed the need for a fixed register for Allbirds, allowing it to better utilize small retail spaces and provide a more interactive experience for customers. This technology has also enabled Allbirds to offer in-store purchasing and shipping to customers – referred to as “endless aisle.” When customers come looking for uncommon or unavailable products, Allbirds staff can process transactions, accept payments, and ship the item directly to the shopper.
Bonobos
Bonobos started as an online-only retailer of men’s clothing. However, in 2012, Bonobos began opening “Guideshops” (its version of product showcasing), understanding that some shoppers prefer to shop in person. “We’ve reimagined the retail store,” says the Bonobos website. “It’s completely personal and we call it a Guideshop.”
At any of the 60+ Bonobos Guideshops, customers can walk in or book an appointment to shop in-store, send their purchases directly to their homes, and make free returns or exchanges – even for online purchases. In-store experts educate shoppers about Bonobos’ product range and help them find the perfect size.
Clearly
The Canadian eyewear and contact lens brand Clearly was launched in 2000 as a cheaper alternative to traditional optics. Since then, the brand has opened four product showcase locations in British Columbia, Toronto, and Calgary.
Why? Because purchasing eyewear can be a physical process. Clearly’s showrooms allow local customers to meet with optometrists, have eye exams, and try on glasses.
Any purchases are shipped directly to customers’ homes, and the showrooms offer special discounts and services such as eyewear repairs, product replacements, and free cleaning of glasses. The combination of in-store and online services allows Clearly to reach all types of customers.
Glossier
Glossier does most of its beauty business online and occasionally through pop-up stores. However, the brand has permanent locations in Seattle, New York, and Los Angeles, and soon in London, which function as showrooms.
Here, visitors can try Glossier makeup and skincare products, talk with consultants and experts, purchase products in person, and experience the Glossier brand firsthand. Best of all, each Glossier showroom reflects its location: for example, the Glossier showroom in Los Angeles gives customers a desert-inspired vibe.
Leveraging Product Showcasing and Online Shopping
Transitioning to Multichannel
Encouraging a cohesive customer experience across multiple channels encourages shoppers to interact with your brand both online and offline.
While customers love browsing online, nearly half prefer to shop in-store. Additionally, retailers with two selling venues generate more revenue than those with only one.
If you haven’t already, consider multichannel commerce. Whether expanding to selling via an e-commerce site, social media, pop-up venues, or showrooms, build a multichannel strategy that works for your brand.
Source: https://www.shopify.com/retail/why-retailers-should-embrace-webrooming
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