Exhibition hall phenomenon, physical shop how to play O2O

Showroom phenomenon refers to the phenomenon that consumers look for lower prices on the Internet after they have experienced the product in an entity retail store, via smartphones or after they go home. If consumers choose to buy elsewhere after comparing prices, the retailer will often suffer losses. In this way, the retail store is reduced to a showroom.

In the US and UK, 82% of shoppers used smartphones to compare shop prices. This has become increasingly common, and it has been given an interesting name-"showroom phenomenon" (showrooming). This behavior is not novel in itself. Consumers often prefer to compare prices before shopping.

For example, before buying a Turkish carpet, they will browse the major stalls at the Istanbul indoor Bazaar or quickly flip through the weekly promotional ready-made of the nearby grocery store to search for the most favorable sourcing. Services such as PriceWatch and StreetPrices, which support consumer online price comparisons, have emerged as early as the mid 1990s.

Today, 83% of American consumers compare prices online before buying electronics, computers, books, records and DVDs in physical stores. It is no exaggeration to say that price comparisons have become an integral part of the consumer shopping process.

So, "Hall phenomenon" is no novelty? Clearly, a consumer's price comparison process is limited to what he or she knows, and retailers are hardest to detect, and other consumers are hard to detect. And pricing is a fair competition game, physical stores are no exception. Consumers will first determine a product, compare the price, decide where to buy, and finally pay. In this multiple contact point and multi-channel purchase process, consumers first to the physical store, and then visit the shop, and finally back to the physical store, this is a typical linear purchase process, and interlocking.

With the rising use of smartphones, with all the hardware on the phone (large touch screens, cameras, faster processors) and software (price comparison applications, code scanning software) devices, consumers can instantly compare prices and shopping to make the entire purchase process ("OK > Survey > Compare > Buy" Condensed into a single and novel process of "Pseudo seeking truth". Unlike a few years ago, it was also an act of visible touch: an activity in a retail entity store.

It is not easy for traditional retailers to see consumers using smartphones to scan bar codes in their stores. Real-store operations inevitably require a certain cost, which makes the price competition between its 0-cost online retailer often fruitless.

In the final analysis, however, the nature of the showroom phenomenon is simple-but an extension of the way consumers buy over the centuries-by comparing prices. In fact, retailers should take a positive look at this unique difference from the current way of buying. Because they can gain insight, understanding and participation in price comparisons.

Consumers do not have to do showroom sales, they are only responsible for purchasing. And their way of buying is changing. The actual discussion of the exhibition hall phenomenon should focus on how the retailer participates in the change. It is therefore important to first understand the role of the entity store and how to provide a unique retail experience through its own channels at the moment of consumer purchase.

World Hall Phenomenon

Although the term "showroom phenomenon" is relatively unfamiliar in the United States and outside the UK, it does not mean that consumers around the world will not use smartphones to compare prices. A number of leading indicators show that consumers using smartphones to compare physical store product prices has become an increasingly popular trend.

As early as 2012, five of the top ten countries in mobile phone penetration were in the Asia-Pacific region. China's smartphone supply is second to none, accounting for 27% of the world's total, and the US ranking as 16%. Even in terms of the number of Internet users, Asia accounts for as much as 44.8%, compared with 11% in North America.

It is clear that the popularity of smartphones and the internet is not the only factor that is fueling this consumption behavior. The price difference between online shopping and physical store shopping is also influenced by the organizational structure of the retail industry, the application of price transparency tools, the usage rate of e-commerce and other cultural factors.

In Europe, many retailers have found a growing proportion of mobile devices browsing their sites, especially customers who are patronizing physical stores.

European

According to a study of 2,000 consumers from France, Germany, Sweden and the UK, 42% of smartphone users used mobile phones to compare real-store prices, and 13% of consumers eventually bought elsewhere.

China

This kind of service already exists long before consumers use mobile phones as a real-store price comparison tool. But one interesting factor to consider in China and some other parts of Asia is that some retailers are actually real estate owners.

The retail mode of the store means that the supplier pays the retailer the rent and the cost associated with the sales revenue. In this ecosystem, retailers will continue to charge rents until consumers flock in. Suppliers focus on brand sales, whether they are in a physical store or online. Z.john Zhang, a professor of marketing at the Wharton School of Business, points out that global retailers can learn from the business model's perspective. In all the short conversations about the market response to the new pricing strategy for JC Penney, the long-term move to build a store is actually a sensible one, at least in terms of mitigating the risk of a real-store price comparison.

8 Suggestions to deal with exhibition hall phenomenon

Recognize that the exhibition hall phenomenon is a common consumption behavior. This is only our "moderate" proposal, but it is particularly important, and that is why we put it first. Consumers compare prices before they go shopping, and now they can do it in a physical store. The goal of a consumer is simply to consider when and where to buy the best deal. Retailers must rebuild an internal dialogue about the phenomenon of showrooms, from price-driven customers to channel-agnostic customers. Therefore, when a consumer is clearly showing interest in a product in your physical store, focus should be shifted from figuring out how to minimize the loss of the showroom phenomenon to how to increase interaction with consumers.

Aim at the physical store and the price of the customer comparison. Compared to the potential sales opportunities that you now have for customers who compare prices at competitive stores, online, and on your phone, the potential sale losses caused by a customer comparing prices in the store are completely insignificant. You can ask yourself if you are making the most of this difficult market opportunity. Today, the concept of "shelves" extends from shop aisles to Web sites, customer mobile apps and even web searches.

First, publish inventory information on your site, in collaboration with key partners responsible for consolidating inventory and pricing information. Seek collaborative opportunities with price comparison application providers such as ShopSavvy (Global), RedLaser (Global), Nokaut (Poland) and GetPrice (Australia) to better position your preferred target audience. For example, if you are a sporting goods retailer, you can easily offer quotes or coupons to consumers who have scanned the competitor's Sporting Goods catalog within a 15-mile radius. One of the easiest tactics is to target customers who have just found a lower price in their competitors but are still in your shop. You must at least make full use of the rich data provided by such vendors (including consumer scanned products, scanning addresses, place of purchase, and purchase fees) as a basis for pricing. Finally, show the exhibit-friendly feature to your local mobile apps and mobile Web site.

Identify and interact with customers who compare prices in the store. Sales assistants must be trained to approach customers who are comparing prices. One strategy is to have the sales assistant provide information about the retailer's price matching policy or provide the customer with an immediate quote or promotional activity. Over time, however, consumers will find this practice less meaningful, especially when it has become an additional service that is expected rather than unexpected. Soon, the intra-store dialogue with customers must shift from a policy-oriented to a real one-on-one interaction to achieve the most beneficial results for both parties. Providing valuable product information to shoppers is also a way to serve customers, such as how the product is priced by the customer, or why she should consider another cheap 20% alternative.

Smart and clever price matching. Real-store retailers cannot blindly match their online rivals because their cost model does not have the economy. Therefore, price matching should be changed from policy decision to a transaction value decision, that is to say, the value of the transaction is viewed from the customer's lifetime value level. To achieve this precision, the only way is to improve multi-channel implementation, the implementation of large data analysis and the overall transformation of access to the entity store monetization profit model. Price matching must also be done from its own. In fact, the price inconsistency between the retailer's own physical store and the shop will only create confusion and alienation for the customer, so it must be eliminated.

To reshape the physical store as a distribution center. The next wave of cyber-retailing is focused on the distribution field. Amazon, ebay (EBAY) and Wal-Mart (Walmart) are starting to execute the next day distribution standards and the daily distribution plan (optional) for most consumers.

For years, real-store retailing has taken a firm footing with "instant gratification" services, for example, where some customers prefer to drive for cash rather than spend days waiting for delivery. And the same day distribution can meet the customer's low price and "instant meet" the needs of both.

Amazon currently spends millions of of dollars to build distribution centers across the United States to shorten delivery times. Today, most big retailers are ramping up such infrastructure, such as physical stores, warehouses, distribution centers and even daring to say that consumers are included. If Consumer-to-consumer (consumer to consumer) distribution to ebay effective, why other retailers can not learn from it? However, to achieve the ambitious goal of Consumer-to-consumer is a long way to go, the retailer must start from the development of online orders/door-to-door pick-up and return standards, and explore to provide customers to the warehouse to take goods (Carrefour (Carrefour) in France) service.

Study the collocation of perishable products and develop unique products, product packaging and product packages. In addition, retailers need to reassess their product mix. Some specifications and types of products than other products more likely to show the phenomenon of showrooms, but the product mix in the same range of products can produce different results. For example, H.h.gregg, a consumer electronics retailer in the United States, stores a large number of appliances and mattresses in its store, both of which are typical products that internet retailers find difficult to distribute in a cost-effective manner. On the other hand, Best Buy, the industry's leading competitor, uses most of its stores for CD/DVD and PC products, and sales of such products have been moving towards online sales over the years. Retailers such as Target and toys R us rely on novel and unique products to create personalized services that attract customers and provide them with products or experiences that cannot be measured at a price.

Reinvent the store and store experience as the biggest feature of the physical store. In the age of showrooms, it is ironic that Apple, the world's highest-earning retailer of every square foot, has designed its store as a flagship showroom. Not all retailers, however, have industry-leading products like Apple, and it is undeniable that the product experience that it offers in the physical stores has made Apple unique and its products much sought after.

The role of the entity store has changed, and retailers need to take a long, rigorous look at the value they offer to customers. If delivering a product in a convenient and immediate way can create important value, what will the Internet retailer do when it delivers the service on that day?

Although specific strategies vary by product specifications, retailers still need to redefine the role of the entity store channel for the overall customer interaction strategy. A physical store can be a distribution center with a storefront, a distribution destination, or a customer service center. Compared with network retailing, one of the biggest advantages of physical store retailing is interpersonal interaction. Retailers should put in place tools that allow employees more time to interact with their customers than store operations. Some of the more aggressive retailers may even consider providing services in the physical stores to help customers search for products and buy in the most valuable places. Customers can compare prices and buy at any time: participating in their shopping process helps build stronger customer relationships and get a lot of customer preference data.

Online apparel retailer Bonobos is a successful example of repositioning the real-store role. It is located in Los Angeles and New York, the physical stores, customers can only advance appointment to experience the product. Only one of their SKU items is displayed in the physical store and is available online only. No products are sold in the physical store.

Make full use of loyalty programs to reduce price disadvantages. The loyalty program for most retailers today is to offer discounts to customers based on their buying activities. Customers can determine the profitability of a transaction through very intuitive mathematical calculations, thereby reducing customer involvement in loyalty programs and directly converting to actual cash discounts.

Retailers make it difficult for customers to compare prices with competitors by introducing intangible, but rather practical, benefits that customers value. This can even help customers decide whether to pay an extra fee for the transaction. In addition, feedback should be provided based on customer interaction, advocacy, activities and background.

In addition to cash discounts, membership levels and special offers should be introduced, including free delivery home, fast checkout, listing products exclusive and shopping assistant services. Evaluate whether the service provided is a Gold Member service: Draw on the Amzon Prime service for the retail business of the entity shop. A detailed framework for creating loyalty plans in close conjunction with a cross channel interaction strategy is included in the EKN industry survey of customer loyalty in the retail industry in 15.

Ekn believes that in order to win customer loyalty, the first step should be through multidimensional customer analysis in-depth understanding of customers. EKN Industry Survey of large data shows that 90% of retailers do not have a big data strategy. In addition, from the maturity of business analysis, only one-third of retailers have the ability to conduct such surveys or predictive analysis to truly understand the needs of individual consumers. If implemented properly, your loyalty program will create intangible value for the customer and dwarf other retailers.