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Retailers: Combat ‘Showrooming’ with SAP HANA

Gathering information in a retail store and then making a purchase online — commonly known as ‘showrooming’ — is picking up steam among consumers and becoming a top concern for brick-and-mortar retailers jilted by the practice.

A 2012 ClickIQ survey reveals that 45.9% of online shoppers are showroomers, and 51% of 16,000 respondents to another recent survey expect all physical retail locations to be primarily showrooms in eight years.

The showroom trend is sure to grow in the years ahead as online shopping proliferates and more consumers consult their mobile phones while in the store.

Respondents to a recent Neilsen survey rate online purchasing as their “overall favorite” (59%), “easiest” (68%) and “most convenient” (68%), and Forrester pegs online sales to grow at a 10% CAGR through 2013.

New research from Deloitte suggests that more than 5% of store sales during 2012 will be influenced by mobile phones, and by 2016, that influence will grow to 19% of sales, or $689 billion.

The drivers for showrooming are pretty straightforward. According to the ClickIQ survey, price (86.8%), no shipping/delivery cost (51.7%), and product availability (51.5%) top the list.

No brick-and-mortar retailer is immune to showrooming, and the cost in lost revenue can be staggering. So what can retailers do to combat this seemingly unstoppable phenomenon?

It’s an interesting use case for SAP HANA.

Know the customer, close the sale

Every time a customer pulls out a smart phone in a store it should serve as a wakeup call to retailers – get smarter, act faster, know the customer and close the sale while the customer is still in the store. Given the ubiquity of smart phones and the prevalence of showrooming, retailers must train and equip sales associates to proactively engage consumers and close the sale in the store.

Consumers want a specific product for the best price with the least shopping effort (and free delivery). Ubiquitous mobility has made price transparency the norm. This is simply how things stand, and brick-and-mortar retailers must adapt to survive.

Consumers also turn over volumes of personal data to retailers, who have gotten pretty good at storing this data, but prior to HANA, were ill-equipped to consolidate and analyze it quickly enough to take decisive action that would stop the shopper from walking out of the store after checking via their mobile device and finding a better price.

Using SAP HANA as a data mart populated with real-time POS data and data from ERP, CRM and other systems, a sales associate armed with a mobile device can now access a customer’s individual profile, past buying behavior and relevant product information, and based on lightning-fast analysis of this information, offer an incentive such as matching an online price, or waving shipping costs, or bundling product offerings. That same associate using the same mobile device can execute the transaction on the spot.

Leveraging the advantage of personal attention, the pull of immediacy, and the power of real-time analysis, the sales associate makes the sale, strengthens the customer relationship, and captures additional data for future use.

Increase efficiency, reduce costs, price competitively

If price is going to be the greatest determining factor in showrooming, then retailers must do everything in their power to drive efficiency gains, reduce operating costs and improve marketing promotions – all of which allow retailers to be more cost competitive.

The SAP BusinessObjects Sales Analysis for Retail analytic application powered by the SAP HANA platform provides insight into current events and activities so that retailers can manage the entire merchandise lifecycle more efficiently; offers a clear picture on which stores are performing best based on revenue, sales, and margins so that the success can be replicated; and provides real-time insight into promotional effectiveness so that retailers can increase promotional lift and margins.

BOBJ Sales Analysis for Retail also provides real-time visibility across the supply chain, enabling retailers to more accurately align customer demand, product assortment, and inventory levels, and empowering retailers with the leverage needed to coax suppliers into exclusive deals and/or product discounts – a surefire way to snuff out showrooming.

Strengthen brand loyalty, provide a seamless, multi-channel experience

The return implied when consumers turn over personal data to retailers is a consistent, accurate, high-quality interaction across all touch points. Consumers don’t perceive channels, they perceive a brand, and they want to see and experience the same thing be it on your site or at your store.

The challenge is for marketers to integrate numerous, disparate, data sources and instantly analyze this huge volume of data (structured/unstructured/operational/transactional) to provide a personalized shopping experience that presents the right product to the right customer at the right price through the right channel at the right time.

SAP HANA enables retailers to accomplish this more efficiently and effectively than ever before. (HANA also helps retailers ensure that no single outlet – online or offline – differs radically from another.)

By empowering marketers to deliver a fluid multichannel customer experience, SAP HANA helps retailers realize maximum value from sales campaigns, and equally important, enables retailers to provide consumers a personalized, pleasurable, fast-and-convenient branded experience that strengthens loyalty — and diminishes the drive for showrooming.

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