90 percent of smartphone users in the United States use their device before purchasing and 84 percent even while shopping according to a study by the e-commerce specialist Shopio. 47 percent use the device to find local information and 50 per cent to find a product. Smartphones therefore play a huge role in today’s purchase process. This is also true among German consumers, of which approximately 80 percent view mobile information searches for product availability as particularly important. Just under half of them then buy the product in a local store after researching it online. This was shown in a study on the future and potential of location-based services for the brick-and-mortar retail market conducted in 2014 by the German trade association HDE, KaufDA and the eWeb Research Center of Hochschule Niederrhein University of Applied Sciences.
The study demonstrated once again that the internet is not an enemy of brick-and-mortar retailers. On the contrary, customers now expect to obtain information on retailers on their smartphones to better prepare for their visit to the store. Experts refer to this trend as webrooming or ROPO (Research Online, Purchase Offline).
But mobile internet also plays an important role in the shop itself. It accompanies the customer in their purchase decisions as an independent consultant. More detailed product information, reviews and tests are researched, alternative products are viewed, and prices are compared. Retailers worry that customers will obtain advice in the store and then purchase the product for a better price from an online shop. However, this so-called showrooming is a coin with two sides.
- On the one hand, customers are lost to online competitors – according to the above mentioned study, 8 percent of Germans even buy on the internet while they are still in the store.
- On the other hand, showrooming can be used in a positive way as a future-oriented concept by guiding customers to one’s own online shop. For example, a huge product portfolio could be hidden behind a relatively small physical sales area, as several pilot projects have already shown (e.g. the “Inspiration Store“, a joint project spearheaded by Metro Group, eBay and PayPal).
Showrooming and the role of smartphones may be worrisome to retailers, but the only long-term remedy is clear. The key is to play the game and take advantage of the trend. Possible components of this type of Location Based Services (LBS) include:
- Actively providing high-speed web access via free Wi-Fi or enhancing the cellular network signal
- Offering coupons and special offers using this network
- Labelling products with QR codes to accelerate online research
- An online-shop that can be used to check product availability
- Integration of special delivery services, returns processing, product pre-ordering and booking of consulting services
- Providing indoor navigation
- Customer registration and associated personalized offers and services such as loyalty programs
- Augmented reality services that can add a whole new dimension to the shopping experience.
LBS offerings should provide true added value and not just be used for advertising purposes. It is important to achieve and strengthen consumer confidence in the service and the retailer as a whole.