Hundreds more retailers have filed for bankruptcy in 2017 — a 100% increase over 2016. This represents an enormous cultural shift in the way consumers shop, the impact of which is devastating to both local communities and their small business owners.
Many industry experts blame showrooming for this trend. Showrooming occurs when consumers use retail locations to ‘shop’, then buy online causing the retailer to lose the sale. These are the price sensitive shoppers who are product-driven; they search for deals to get the lowest price and don’t care about service. The mobile-assisted shopper has more information, power, and control than ever over their shopping experiences.
It’s not just retail businesses that are showroomed, it’s services too. I have many friends and colleagues in various design businesses who suffer as well. When a cash-strapped startup can have a logo designed online for $99 it’s highly unlikely they’ll pay $750 or more — even for a much better result. Lawyers are showroomed now too. When a consumer can download a simple legal document for just a few dollars, why would they pay hundreds to a lawyer?
If you’ve had this happen to you, here are some tips to help combat this phenomenon:
Superior Customer Service – If you and your staff are trained properly, it’s much harder to lose a sale. Greet walk-ins with a friendly smile and direct eye contact and a short intro, ‘Welcome. My name is ________. What brought you here today?’ (Note: Never ask a question that can be answered with a ‘no’.) With superior customer service top of mind, reinforce this at every step. The American Independent Business Alliance writes, ‘don’t make it easy for shoppers to showroom your business guilt-free.’ They also say ‘hire salespeople, not clerks.’ For years, I’ve said that everyone who interacts with your customers is a salesperson in some way. From answering the phone, to responding to emails, to the in-store experience. If you hire with this in mind, you’ll be in top competitive shape.
Have a contact strategy – Face to face businesses are in a unique position to interact with their customers in many ways. Be sure to have an email and snail mail sign up list and train any employees to proactively ask customers to join the lists. Keeping in touch with them periodically means you’ll stay top of mind and you’ll spend far less in advertising costs while maintaining a healthy pipeline. Keeping your customers tethered to you, means spending less on acquiring new ones, and not having to chase them all over the neighborhood or the internet. Email marketing provider Campaign Monitor states that email is the most productive channel and returns $38 for every dollar spent. I know it has worked for me all these years.
Product and Experience Customization – If you sell what everybody else sells, your business is far more susceptible to being showroomed. Even with the best retail location, it will become more difficult to retain and acquire new customers. However, if the products you sell can be customized to your unique demographic, it’s no longer a shopped commodity. While researching this topic I found examples of companies that customize everything from bicycles to stuffed animals to vacations. Consider how you might bundle products and services together to customize a shopping experience. For example, I read about a clothing store that offered free basic tailoring in-store; a kitchen store that offers cooking demonstrations; a mom & pop pet supply store that offers in-store product discounts when you bring your pet to their free monthly nail clipping event. Be creative and give your customers something they can’t get anywhere else.
Think relational, not transactional – When I lived downtown Stamford, there were many small businesses walkable from my apartment building. The city had a small-town vibe and it was wonderful to walk into a store and be greeted by name. One was a liquor store that was very, very small (limiting their inventory). Once the owner chatted me up and learned I had just moved there from California, he offered to order any wine I might miss from there. I’m sure almost any liquor store can do this, but because he was so friendly and I was so willing to talk to him, it felt to me that he was offering me something special. Another way to do this might be to put bios of your employees on your website — a nice warm, personal touch that makes your business feel like a place that people want to shop.
Promote Shop Local – Most people cognitively know that sales tax revenue raised in their towns and cities pay for libraries, the police, fire, and EMS services, and schools. But sometimes they need to be politely reminded. Posting a ‘Thank you for keeping your money in our community’ sign or two in your location can be very effective. Did you know that 46% of every dollar spent at a local mom & pop store stays in the community, but that just 14% spent at a chain store stays? By supporting locally-owned businesses, the entire community thrives. Note for November: Start planning now for #SmallBusinessSaturday2017. Download your free Small Business Saturday Guide and take advantage of free marketing and promotional materials and campaign ideas.
With these tips in mind, it is possible to create an atmosphere of warmth and trust with prospects and customers so they keep coming back to you and not your competitors.