Portman's former store at Raglan Square

Portman's former store at Raglan Square

Can social media and mobile help Australian retail combat showrooming?

Reading Time: 4 minutes Retail is one of numerous industries facing pressure from the forces of creative destruction. This post is detailing the issues of showrooming faced by the retail industry. The post ends with three ideas how social media and mobile can help retailers engage customers.

Reading Time: 4 minutes

The National Retail Association generated headlines with a report commissioned by Ernst & Young that states 118,000 retail jobs may be shed by 2015.

In the Sydney Morning Herald’s coverage of the issue, Ian Mcllwraith quoted directly from the E&Y report:

”Regardless of the LVT (Low Value Threshold exception provided to goods purchased from foreign online retailers), the remaining 84,600 jobs would be lost to the traditional sector due to the structural changes and competition caused by the growth of online retailing,” said the Ernst & Young report.

Australian retail is a living case study of an industry struggling under the forces of creative destruction.

Showrooming – driving creative destruction in the Australian retail industry

One of the new media based forces of creative destruction forcing Australian retailers to panic is called ‘showrooming’.

The Wall Street Journal describes ‘showrooming as “when shoppers come into a store to see a product in person, only to buy it from a rival online, frequently at a lower price.”

25% of respondents that own a mobile said they look up prices online of a product they found in a store.

A PEW Internet research study found 25% of mobile owners used their device to look up the price of a product online while they were in-store, to see if they could get a better price somewhere else.  The study was conducted 30 days before and after the 2011 Christmas shopping season.

In Australia, a Google report found that 1 in 3 shoppers now consider buying from a mobile device when in-store (source: Understanding Impact Of Wireless And Connected Devices On Online Research And Purchase Process AU 2011).

Currently showrooming is a niche shopping behaviour.  As the Australian adoption rates for smartphones and online shopping continue to increase, bricks and mortar Australian retailers need to get busy being creative or get busy being destroyed.

Three strategies for Australian retailers to leverage social media and mobile

Appreciating that showrooming is only one of many complex issues facing the future viability of Australian retailing, here are three new media strategies that may help the Australian retail industry remain viable.

Create/optimise your website for a smartphone

Around 20% of unique vistors to STC are using a mobile device. Top two devices – iPhone and iPad.

Google claims 4 out of 5 businesses’ websites don’t work well on smartphones in Australia.  Making the assumption the majority of Australian retailers are small businesses, optimising their website for viewing on a smartphone / tablet needs to be a priority.

Google has launched an initiative titled GoMoMeter.  With close to 50% of Australians owning a smartphone, GoMoMeter is a great initiative that helps educate people what an optimised website for a smartphone should look like.

Once a handful of questions are answered, Google uses these answers to give a high level overview how you may or may not be optimising your website for a smartphone.  Google can also email a report that dives a little deeper into the core principals of a positive user experience.

For retailers thinking when to invest in a presence tailored for mobile (i.e. smartphone app), my good friends at Mobiddiction have a great post about when to invest in mobile.

Socialise your brand by embracing your consumers

Attending the Online Retail 2012 Roadshow in Sydney, I heard Susan Gregg Koger, Founder and Chief Creative Officer speak about her online fashion brand ModCloth.com.

ModCloth.com is unique because it actively places the consumer at the center of their business. Engagement has become the hallmark of the ModCloth.com brand.  One such initiative is titled ‘Be The Buyer’.  The objective of the program is to get consumers involved in the product development process.

Susan told the conference that only 16% of members vote on Be The Buyer, yet these items sell 2.4 times more than other items.  Perhaps it’s due to Be The Buyer being an opportunity for consumers to engage with the brand before purchase?  Susan said that 30% of members vote before they buy their first item.

MoCloth.com gets their consumers involved at the product development stage. (Image: @M_Hickinbotham)

Other retailer insights raised by Susan include:

  • Treat social media as your storefront.  Retailers need to watch what’s going on in social media and appreciate what is driving traffic to your site.   You need to be talking to people in this medium.
  • Give consumers a reason to visit your digital presence daily.  ModCloth.com launches 15 to 30 new products a day.  Consumers have fun checking out what’s new and it encourages people to visit the site on a daily basis.  Retailers looking to connect with customers in social media need to give consumers a reason to keep coming back.

Enhance the in-store experience for customers using their smartphones

The strategy behind this final idea is to win the attention of customers using their smartphones when shopping.

Shopkick is a geo-fenced location app. Once a customer, with the app open on their smartphone, crosses the electronic barrier (ex: front doors), the app begins to communicate with the customer.  This can include offering geo-couponing.

If a customer enters a particular part of the store, through Shopkick they can receive coupons highlighting what items are on sale etc.  This is technically possible as customised hardware is installed throughout the retail outlet.

TechCrunch reported that after it’s first full year operating the app, Shopkick helped drive more than $110 million of in-store revenue for partner retailers and brands.

What examples have you seen where Australian retailers are effectively using social media and mobile?

Contact Mike

2 thoughts on “Can social media and mobile help Australian retail combat showrooming?

  1. Nice post Mike. 

    I guess it’s different ways that consumers are interacting or expecting any business to have their presence defined – irrespective of where or which device consumers are trying to access content from. Whilst it’s become hard for businesses and brands to try and accommodate the various devices – it’s also an opportunity to tailor and provide consumers with the right engagement. 

    Mobile + Social Strategy = Success! 

  2. You should have been interviewing Gerry Harvey last night on Lateline. Though to be honest, I think a lot of his positioning is just that … he is too shrewd a businessman to not be investigating online shopping in a serious way.

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