Yesterday, IKEA made its foray into virtual reality with a pilot program for a branded VR showroom experience. Designed for HTC’s Vive headset and available on Steam, the experience will allow consumers to step into a highly customizable virtual IKEA kitchen, where they can, for example, change the cabinet and drawer colors and view the room from the height of a child or adult. The pilot is scheduled to run through the end of August.
What Brands Need To Do
As a nascent medium, virtual reality holds great potential in marketing for it enables brands to engage consumers with immersive experiences and offer customers a well-rounded look at their products, services, or stores. IKEA’s VR experience makes virtual showrooming an interactive and customizable experience, something that all brands can learn a thing or two from when developing branded VR content.
Showrooming refers to the popular practice of consumers visiting retail stores in order to examine an item before buying it online instead, and it is hurting the bottom line of many brick-and-mortar retailers. Lower prices offered by online sellers is a primary reason for showrooming, and that’s why some big-name retail brands, such as Sears, Kohl’s, and Home Depot, are installing digital shelf displays, which allow for real-time adjustment of product prices, at select stores in order to match the low prices shoppers find online.
What Brands Need To Do
While it may be an effective way for physical stores to compete with online marketplaces such as Amazon, it is in fact a rather pricey solution, as digitizing all price tags in one single store could reportedly cost up to six figures. In order to better combat showrooming, retailers need to think about more ways to incorporate their digital assets into physical stores, like what Rebecca Minkoff did, or figure out ways to convert customers to webrooming, which entails product research online before in-store purchase.
Source: Bloomberg Business
Amazon is raising the stakes of showrooming for retailers once again, folding its “Flow” technology, previously found in a standalone app released by its subsidiary, A9, into its main shopping app for iOS. “Flow” is visual product search, allowing users to photograph an object and see details about it on Amazon, which is even simpler than the previous norm of barcode recognition. Amazon’s competitive pricing is its main advantage in comparison to retailers, and by more effectively using other retailers as showrooms for the products it sells, it has the potential to further extend its dominance in more consumer categories.
A new study about the increasingly common practice of showrooming – experimenting with products in-store while comparing prices in real time and purchasing the item later, at home, for less money – indicates that many users who engage in this practice head straight to Amazon to make their final purchase. In fact, 57% of showroomers chose the massive online marketplace, while only 3% were likely to try eBay or Walmart. During the 2012 holiday season, 48 million shoppers reportedly engaged in showrooming, which means that Amazon alone received 27.36 million showroomers who redirected from brick-and-mortar stores to the online service in search of lower, more competitive pricing. This is, in part, due to the large number of Amazon Prime members, who have access to free two-day shipping; it’s also due to knowledge about pricing. For instance, Amazon’s prices on electronic items are, generally speaking, 17% lower than Best Buy – so it’s easy to see why a consumer would test a product in the store and take a 17% discount with free 48-hour shipping with a Prime membership. That said, price matching initiatives taken by stores to combat this practice seem to be working, as 68% of consumers will check a store’s price matching policy before taking their business online, and 95% of customers day that free shipping offers influence a purchasing decision.
A new study from IPSOS and the IAB indicates showrooming leads to in-store sales. While 42% of consumers using mobile as a shopping tool made their purchase online, 30% made one in the store. For retailers, the key will be enabling product information and customer reviews in a controlled environment via a mobile app like shopkick or through digital signage. Don’t fight the phone guys, embrace it.
Best Buy believes that its latest policy shift will destroy the now-common practice of “showrooming” in its stores. On March 3rd, stores will display all local retail competitors prices, along with 19 “major online competitors” in all product categories. This comes on the heels of Best Buy’s temporary price-matching initiative that debuted during the holiday season, and after its apparent success the retailer is making the shift permanent. Showrooming is a growing worry for electronics stores, as the practice effects sales of gadgets and devices more than any other category. Price matching for Best Buy will include major competitors such as Amazon, Apple, Newegg, OfficeDepot, Staples, and Target.
With the majority of Americans armed with smartphones, mobile shopping is reaching critical mass. Mashable has published a comprehensive infographic that maps out the trend, predicting mobile shoppers to grow to 111 million by 2015, up from 35 million in 2010. Books/magazines, tickets and music/videos are among the most popular purchases.
Best Buy to Match Online Prices
Is the future of retail showrooming?