This holiday season Walmart is offering consumers a mobile app that lets them access information about inventory when they walk into a Walmart store. Customers can then seamlessly flip between product data in the physical store and product data in the online store.
By its own admission, this is a big part of the big-box behemoth’s strategy to embrace showrooming, the growing trend of consumers visiting physical stores to check out merchandise and then using their smartphones to compare prices of the same product elsewhere.
The app is part of the company’s “blended channel” approach, Gibu Thomas, Walmart’s senior vice president of mobile and digital, tells Wired. Mobile is becoming a key part of how the store interacts with customers.
Walmart, and other retailers like Macy’s are upping their customer engagement game across channels to offset the large increase in shoppers who will rely on their smartphones this holiday season.
Companies that are most effective at combating this type of new threat are those who have used data analysis and predictive analytics to predict what type of engagement will resonate most effectively with their existing and new customers.
Walmart has long been a pioneer of using data analysis, data discovery and predictive analytics to gain a 360-degree view of its customers across multiple channels to effectively predict and meet changing consumer preferences.
This latest evolution seems to be working as more than 12% of online sales made through Walmart’s smartphone app are happening while customers are in the company’s physical stores, or while they’re in the app’s in-store mode.
Research firm IDC predicts that 48 million shoppers, or 20% of the US adult population, will showroom this season, up 134% from last year. This year, showrooming will influence $0.7 billion to $1.7 billion in holiday retail purchases, according to IDC.
The firm goes on to note that retailers that provide “consistent superior customer service, run outstanding loyalty programs and rely on everyday prices” across all channels are best protected from the detrimental effects of holiday showrooming.
Furthermore, Deloitte notes in its holiday spending forecast that retailers’ most lucrative customers will be those they can engage across virtual and physical storefronts.
“Consumers should see more price transparency across mobile, online and store channels, and retailers will use these same channels to gain insights into their core customers’ behavior,” says Alison Paul, vice chairman of Deloitte LLP and retail & distribution sector leader. “Retailers that interpret and respond to real-time information about shoppers can hit the right notes on pricing and promotions that drive traffic without eroding margins.”
So, how can retailers fend off the potential market share erosion from showrooming?
First, retailers must realize that the consumer is channel agnostic, moving effortlessly between a virtual store, a physical store or a smartphone in search of the best deal for a desired product, notes Retail Info Systems News.
“However, anyone who doesn’t frame the showrooming discussion in the larger context of cross-channel consumer engagement may be missing the forest for the trees,” the article notes. “Fundamentally, showrooming is a case of value mismatch between what is important to the consumer and what a typical store or retailer offers. Retailers cannot combat showrooming effectively if the primary value their stores offer is physical and convenient access to products.”
Primarily, retailers should match prices smartly and opportunistically, according to research that’s cited in the article.
“Price-matching needs to go from a policy decision to a transaction value decision – i.e., what is the value of this transaction in the context of the lifetime value of the customer,” according to the article. “The only way to get to this level of sophistication is through improved cross-channel execution, big data analytics, and an overall shift in how to monetize a store visit.”
The research also suggests that retailers license and aggregate data from price aggregators and demographic and behavioral data to make targeted offers and fend off showrooming.