BUSINESS

Mobile is both curse and cure for retailers at risk from showrooms

Tuesday 28 May 2013, 8:49PM
By PPR New Zealand
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TNS’s 2013 Mobile Life study reveals how high street retailers can turn browsers into buyers

Latest research findings released by TNS reveal that mobile can play a valuable role in reducing the risk that ‘showrooming’ poses to retailers. ‘Showrooming’, where people visit stores only to test products but buy them later elsewhere, has emerged as a significant threat to the high street in recent years, with one third of mobile users globally admitting to ‘showroomingbehaviour.

TNS’s annual Mobile Life study, based on responses from 38,000 people in 43 countries, shows that whilst showrooming is a very real threat, mobile can offer a solution to brands in minimising this risk. Among those who showroom, two thirds use their phone whilst doing so, providing a major opportunity for brands to interact with consumers via mobile and turn browsers into buyers.

David Thomas, Director of TNS New Zealand, said, “There is both risk and reward for brands:  mobile Internet and online shopping are coming together in a way that is posing a very real threat to traditional bricks and mortar retailers. However, there is also opportunity to mitigate that risk for brands that get their customer engagement right.”

Some behaviours - such as using a mobile to conduct independent research in-store - do present risks to retailers, as external influences may increase a shopper’s likelihood of leaving without making a purchase. However, the study shows that people are open to engaging with brands whilst in-store, with more than a third of smartphone owners in New Zealand keen to receive mobile coupons whilst shopping and two-fifths interested in apps that help them navigate the store they are in, compared to one fifth of people globally.

Meanwhile one in ten consumers in New Zealand are interested in a ‘virtual sales assistant’, who will help answer their questions in-store about a particular product. This openness to interacting does present a real opportunity for brands that get their mobile strategy right, to engage meaningfully with people at the point when they are considering a purchase.

David Thomas continued, “People still want the reassurance of seeing a product before they buy it, but purchasing elsewhere means retail outlets can be left as loss-making display cabinets. Rather than seeing mobile as a threat to in-store sales however, brands and retailers must embrace it as the most immediate and personalised way to engage shoppers to ensure they don’t leave empty-handed.”

Showrooming is a global phenomenon, but the role played by mobile varies significantly across the world. In markets where people’s first introduction to the Internet has been via a handset, shoppers are highly likely to use their mobile when showrooming – 75 percent in emerging Asia, 87 percent in the Middle East and North Africa and 67 percent in Sub-Saharan Africa. People in developed markets, where online shopping is well established, are less likely to do so, with 55 percent of showroomers in North America and 56 percent in Europe using their phones in this way.

The biggest drivers for showrooming consumers are twofold: reassurance on price and reassurance on suitability, with 10 percent in New Zealand reading reviews or checking social media whilst in-store to inform their decision-making compared to 16 percent globally, and 15% asking friends and family what they would recommend buying (25% globally and as high as 49 percent in emerging Asia and 42 percent in India).

Having knowledgeable sales staff on hand is no guarantee of success, with 26% of people in New Zealand preferring to access information on their phone than speak to a sales assistant in store, compared to almost a third of people globally and two-fifths of 16-30 year olds.

Thomas concludes, “Mobile might seem like the enemy – opening up the retail environment to a potentially limitless range of competitors. However, anything that saves the consumer time, money or angst will help reduce the flow of people out of the shop to purchase elsewhere. In understanding exactly how consumers are using their mobile in-store, brands and retailers can improve their own offering – whether through apps, mobile coupons or simply greater provision of information – and begin to nudge shoppers back towards the tills.”