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Is your dealership an e-retailer’s showroom?

Ben Borchert, Marketing Analyst — 50 Below, an ARI Company
March 12, 2013
Filed under Service Providers

You may have seen it at your dealership already. A potential customer walks through your business and stops at a product. He looks it over carefully and “kicks the tires,” so to speak. Then, he pulls out his smartphone — iPhone, Droid, Samsung Galaxy, whatever — and starts tapping his finger across the screen. You may see him look at his phone, and then down at the price tag of your product. And, as quickly as he enters, he leaves. So, what happened?

This is a relatively new phenomenon called showrooming. Showrooming is when a potential customer goes to a brick-and-mortar store, looks at a product to see what it looks like in person, then buys it online.

And, a lot of people are doing it. In fact, half of shoppers who buy products online first check them out in a traditional store, according to a recent study by Minneapolis-based research firm ClickIQ, Inc.

With Internet access on smartphones, it is now easier than ever to search for the lowest price on just about anything anywhere, anytime, including while in your dealership. When consumers walk through your store, they can type the product name right into an Amazon search and see the price difference between your product and Amazon. You can’t blame them — who doesn’t like saving a little money — but with this growing trend, you need to be aware of showrooming, and find ways to combat to it.

To help position yourself against showrooming in your dealership and win, consider the following:

  1. Consider matching online competition pricing. A recent article in The New York Times says, “Target and Best Buy have made it pretty clear they are fighting back against the phenomenon of showrooming … Both companies recently made their seasonal practices of matching prices at online retailers a year-round policy.” Adding a similar policy in your dealership, where possible, will help you close more sales.
  2. Add value that Internet-only companies cannot. Perhaps add a percentage off service when your customers buy in the store. Your business services cannot be replaced online, so make sure consumers know that. “The big thing is you want to be competitive on price, but it’s not going to be sustainable to say (you) will have the lowest possible price all the time. So (you) have to go for different things like a better experience, different return policy, and better service and support,” David Shim, CEO of Placed, a location analytics first that studies shopping habits, told CBS Philly.
  3. Build your local brand. In the past few years, the shop small, shop local and small business movements have been gaining momentum. Position yourself as a member of your community.
  4. Introduce yourself to customers. The human connection is something the Internet, try as it may, can never replace. Greet everyone who enters your store. And, make sure you immediately engage with a buyer you suspect is showrooming. If you don’t, you’ve missed the opportunity to win the sale.

Buyers who practice showrooming should be viewed as a new type of customer who requires a new strategy. With the right strategy, your “showroom” will also be the sales floor for these new customers.

Like all members of 50 Below, an ARI company, Ben Borchert wants to help powersports dealers help their customers. Ben uses his skills as a Marketing Analyst and Writer to empower, educate, and advise dealers in the ever-changing realm of online marketing. To view more of Ben’s articles visit www.50below.com/knowledge.

Website: www.50below.com

Comments

2 Responses to “Is your dealership an e-retailer’s showroom?”

  1. Dale on March 12th, 2013 5:06 pm

    How about doing business with companies that enforce a strict MAP policy?
    Unless the manufacture truly teams with the retailer then all you have is a pricing race to the bottom

    [Reply]

  2. Jim Dahline on March 13th, 2013 7:43 am

    Ben, love it. One thing that I rarely see read in “showrooming” articles is that using a good retail finance offer is something that generally, online retailers do not compete with. Of course, this is only for larger purchase products, but I never see it with retailers like Best Buy which is amazing.

    #4 is probably the most effective, yet most under executed, strategy. I once read a dealer’s post about being so annoyed at watching a customer come in, pull out their phone, struggle trying to use it and just watching them through the entire process. Maybe the person was trying to just check an email or something and was having trouble. ENGAGE the customer.

    Thanks Ben, Hope all is well.

    [Reply]

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