Retailers Find Ways to Win Over Smartphone-Using Showrooming Shoppers

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scanning a barcode with a smart phone to compare pricesIn recent years, brick-and-mortar retailers have grown increasingly weary at the sight of customers showing up at their stores with smartphones in hand.

Apps now let shoppers make price comparisons on the fly. Scan a barcode, and you can immediately find out where the product on the shelf can be found cheaper. The result: Hordes of shoppers visiting retail locations to "showroom" -- test out a product in the store, then go home and buy it online at a lower price.

It's a problem that retailers are scrambling to address this holiday season, and a couple of retailers will even take the potentially costly approach of offering to match the prices of online competitors like Amazon (AMZN). But some experts suggest that a smartphone-equipped shopper should be seen not as a problem, but as an opportunity.

Hey, Big Spender

That's especially true in light of the latest iteration of Deloitte's annual Christmas shopping survey, released Wednesday. The survey found that so-called omnichannel shoppers -- those who shop both in store and online -- will spend 71% more this holiday season than store-only shoppers, with an average expenditure of $600 on gifts.

Why this should be the case isn't entirely clear -- it may simply be that those with smartphones and tablets are in a higher income class, and thus have more disposable income to throw around at Christmastime. But as smartphone penetration has soared over the last five years, it has become less of a signifier of income.

Rather, it may simply be that consumers are more likely to make a purchase if they're able to convince themselves that they've researched their full range of options and prices.

"The folks that use the omni approach as a consumer -- checking prices, using social media, reading reviews – maybe they feel more comfortable spending," says Joe Welter, a partner in Deloitte's retail practice.

Whatever the cause, there's little doubt that this is a market segment that retailers should be eager to please. And that means tailoring their sales approach in a way that gives these savvy consumers the multichannel convenience to which they're accustomed.

"The smart [retailers] early on have adopted an omnichannel vision that says you can buy online and pick it up in-store," says Welter. "Or you can see it, feel it and touch it in the store, then go to a sales associate and they'll ship it with gift wrapping."

The former approach is seen at most retailers with an online presence, allowing consumers to get the convenience of online shopping without having to pay shipping fees. (Walmart, for instance, offers free site-to-store shipping on most items.) And the latter is also on the rise. Take Target (TGT), which has fully embraced smartphone-equipped shoppers by putting QR codes on select items; shoppers with Target's app can scan a QR code, buy the product online and ship it anywhere for free.

Deals, Deals, Deals

Other retailers are wising up to the fact that the smartphone in that shopper's hand is another channel for delivering promotional offers.

Walmart's (WMT) mobile app, for instance, embraces omnichannel customers in a number of ways: You can shop Walmart's website through it, or if you prefer to shop at your local store, it will show you the aisle numbers of the items on your list. And it also recognizes the value of letting customers get promotional offers from their smartphones. The app lets you find your weekly ad, and also lets you "clip" coupons of your choice for use in store.

Unfortunately, it's not a totally convenient process. Rather than letting you simply bring up the coupons on your phone while you shop, the app emails you a link to your clipped coupons. You must then open the email on a computer, install a printer plug-in from Walmart.com, then print them out and bring them to the store.

But others are offering a more seamless experience. Coupons.com, which carries codes and printable coupons for supermarkets and department stores alike, announced Wednesday that it's integrating with Passbook, one of the new features of Apple's (AAPL) iOS 6. Intended to relieve some pressure on your overstuffed wallet or purse, Passbook lets you store everything from boarding passes to movie tickets to gift cards and coupons on your iPhone or iPad.

While the Coupons.com app doesn't yet integrate with Passbook (there, as with Walmart's app, you'll still need to email and print at home), the mobile site works well with the new feature. If you have iOS 6 on your iPhone or iPad, visiting the site will show coupons from a variety of retailers that accept coupons on phones; clicking "Send to Passbook" will do just that, and participating retailers -- including Barnes and Noble (BKS), Macy's (M) and Old Navy (GPS) -- will be able to scan the coupon right from your phone.

That's convenient for consumers who don't want to physically clip coupons, and like the idea of grabbing deals while they're standing in the store. But it's also a boon to retailers.

"We're seeing the convergence of e-commerce and the in-store shopping experience, and as long as the opportunity to save online and in-store is equal, consumers are very happy to make that purchase [in the store]," says Coupons.com CEO Steven Boal. "And if they can have a fluid experience, they're more likely to buy."

And more and more shoppers are seeking out ways to get deals on their phones. In survey results released Wednesday, price-comparison site PriceGrabber found that 70% of shoppers intend to download and use coupon apps this holiday season.

Of course, price is still going to be the bottom line for many consumers, and particularly savvy shoppers with the full range of price-comparison apps might still go home and buy on Amazon or another e-commerce site if they find a lower price even after couponing.

But as J.C. Penney has learned the hard way, the promotional value of coupons and special offers can't be underestimated. If retailers can seamlessly deliver those offers directly to a customer standing in the store, that customer is a lot more likely to make a purchase on their way out.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.




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