I’m sure a few people have downloaded or watched an illegal film. Perhaps some of you have even (inadvertently of course) bought a fake product but I would wager that the vast majority of us have taken part in Showrooming. Not that the activity is illegal in any way I should add, although by whipping out your smartphone in a shop and casually checking the price elsewhere, we could be damaging the health of the High Street retailer.  

Showrooming is the practice of examining merchandise in a traditional brick and mortar store then using click and order to get it at a better price.  This is not a new phenomenon. Price comparison websites have been part of our online experience for many years.  The first real recognised comparison website, Jango.com launched 20 years ago, whilst www.shopping.com was launched at the start of the dotCom boom in the final years of the 20th century.  What has changed is the rapid growth of smartphones that now allow us to access such applications faster and from the palm of our hands.  It is now estimated that in the US alone there are over 180 million smartphone users, with 34 per cent using their handsets.

The Christmas trading figures for 2014 (including the now global sales around Black Friday and Cyber Monday) show continued growth year on year, with online sales once again recording impressive growth.  Some brands such as Shop Direct which own the Very.co.uk brand reported their best day of sales ever on Black Friday 2014 whilst online grocer Ocado, reported a 15 per cent increase in like for like sales.  The development by major brands of smartphone Apps now makes it easier than ever to find products offline then order them immediately online.  Online retailers such as Amazon now even offer same day delivery.

Shopping later

In a survey carried out by ComScore within the UK retail market, over 42 per cent of respondents admitted they had taken a picture of an item in-store for purchase at a later date online, whilst in the US Nielsen report that 66 per cent of consumers use their smartphones to check prices of products elsewhere.   Over 7 per cent of visitors who use their mobile to access Amazon in the US go on to buy a product.

It is true that some High Street brands have disappeared in the past few years, blaming the rapid growth of online brands such as Amazon who now offer almost every product from A to Z (which in fairness was always their objective), the failure of the retail sector to adopt mobile-based technology and customer interaction is more of a concern. If you can’t beat them, then you need to join them.

 Many shopping centres and malls offer free Wi-Fi today yet few retailers understand how to engage these smartphone users.  Instead of discouraging consumers from using their phones in-store to access online offers with other retailers, why not offer discounts and special deals for these users?  If smartphone users understand that they can get even better prices or special offers by “checking in” to an online website for an offline brand then they will build not only brand loyalty but revenues.  Whilst all consumers want the “best deal” they also want their products immediately.  So if they can have their cake and eat it why wouldn’t a brand use technology to keep their customers?

Growing concern

Unfortunately, showrooming also has other consequences for a brand.  Shoppers who use decide to search online for products online may well find bargains, but they also expose themselves to the risk that the products they are buying are not the real deal.  This is a growing concern for the luxury brands where customers want the real deal but are not prepared to pay the retail price. Whilst it may be obvious to many online shoppers that supposed luxury branded goods being sold at a fraction of a cost may not be genuine, some shoppers are still duped.

The maxim “if it looks too good to be true, it probably is” is the watch phrase when searching for luxury branded goods online.  Luxury brands rarely use words like “discount”, “cheap” or “deals” in their online advertising but that doesn’t stop counterfeiters using these keywords to drive traffic to their websites which at best will supply cheap, poorly made and potentially dangerous fake products, at worst will simply take customers money and will never be seen again.

Social engagement strategy

If a brand is able to develop a social engagement strategy then it may be able to hit both objectives of increasing in-store sales from online activities and reduce the amount of revenue lost to counterfeit sales of their items.  Online brand protection services (from organisations such as NetNames) to detect and remove fake websites and social media profiles selling counterfeits will also help to remove the visibility and availability of counterfeits to the luxury brand shopper. Some creative and innovative thinking is required from luxury brand holders to keep shoppers off the price comparison websites and spending with the brand whether that may be online or in-store.

Technology continues at a pace the like we have never seen before.  Brands that embrace the in-store smartphone user and turn them from showroomers into shoppers will be seen as true innovators.  Consumers’ social engagement patterns will soon spread the word about the revolutionary customer experience that a brand will offer and consequently see them stay one step ahead of their competitors in one of the most competitive market places. Complementing this, NetNames online brand protection can help luxury brands also stay one step ahead of the counterfeiters – who are often a brand’s biggest competitor.

 Authors are Stuart Fuller and David Franklin, Netnames. NetNames is one of the world’s leading online brand protection and domain name management specialists offering services for brand protection, domain name management, online security, anti-piracy and acquisitions services. NetNames can be found at ww.netnames.com and on Twitter @NetNamesDomains.