If I’m in a store and I see a product that I’m interested in, but don’t know much about, I will typically whip out my smartphone and Google it for more information and some price comparisons. This is called showrooming, and whether or not I do it depends on what store I’m in.
If at a big box store, I would likely look the information up on my phone to avoid an awkward encounter with the sales individual who likely doesn’t have the knowledge to help me make an educated decision. Say I’m at the local independent appliance store, Felton Appliances and Electronics. There, I would walk up to the sales counter and talk to the knowledgeable employee, who has worked there for 20 or so odd years, to ask about the product in question. But what if I start out at the big box store because I wasn’t aware of the appliance store down the street? That appliance store doesn’t stand a chance.
Showrooming is becoming increasingly more common. According to a 2011 Insight Express study, smartphone users comparing in-store prices with those online has increased from 14% in 2009 to 59% in 2011. These numbers are hard to ignore—and suggest that dealers need to grow their presence as online retailers.
When a customer checks online for pricing, the lowest price often wins. Online retailers are selling at an advantage with lower prices thanks to tax leniency. Currently, many online retailers are not required to charge tax on purchases. Bills like “The Marketplace Equity Act” have been introduced that would level the playing ground upon approval. The Marketplace Equity Act would authorize states to require internet retailers to collect a sales and use tax to be paid to the state where the item is sent upon purchase. Until that bill is passed, in-store retailers are at a disadvantage because they continue to collect taxes while most online sellers do not. That could add up to an average of 5 to 10% price difference on a given product.
While not all dealers have the time and resources to offer products for sale online, it is sometimes an option to partner with your supplier to find a solution. Manufacturers like Rotary (Parts Supplier Turned Internet-Retail Partner) and The Toro Company (Toro Brings Their Dealers to the Online Marketplace) have seen the trend in purchasing shift toward online, and have sought ways to help their dealers reach an online audience.
In order to remain competitive, dealers need to grow their presence online. Ideally, your website would allow customers to compare and purchase products. If you can’t, or don’t want to deal with the extra work of delivery, allow products to be purchased online for in-store pickup. Bottom line, you need to be online.
While you still may not be able to meet the price of the local big box, you can offer customers online the shopping experience you have worked so hard to perfect in-store. Customers choose independent dealers for their knowledge, expertise and product support. Show that customer online what you have been showing in-store customers for years. It’s important to be where the buyers are. As they shift to online, so should you.