What would you pay for an opportunity to browse a store?
There have been a couple on instances in the news this week that highlight the general challenge that retailers face in the age of showrooming. For those uninitiated, showrooming is when consumers go to the physical stores, wander the aisles and perform price comparison and/or complete the purchase on their mobile device. In short, they’re getting the full, physical retail experience – which could even include some consultation by the sales associate – only to lose the sale to the online channel or another retailer who is offering a better price. Best Buy has been at the center of this mobile trend and his been fighting – with all guns blazing – by offering matching prices and more. Many retail pundits agree that physical stores need to offer more services and value if they are ever going to compete. Looking at platforms like the Genius Bar at Apple‘s retail experience points to a retail environment where physical goods are sold alongside of services and more experiences.
Would pay for the opportunity to wander the aisles.
At first blush, this sounds insane. Do we actually think that consumers would pay a fee to come into a store if they don’t buy anything? It’s already happening. In Brisbane, Australia a specialty food store got international attention this week for posting a sign on its door that read: "As of the first of February, this store will be charging people a $5 fee per person for ‘just looking.’ The $5 fee will be deducted when goods are purchased." The sign goes on to explain its reasoning: "There has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else. This policy is in line with many other clothing, show and electronic stores who are also facing the same issue."
They are not the only ones.
This type of "pay for admission" is a little bit more prevalent in the luxury goods space. It has been reported that a Vera Wang boutique in Shanghai charges consumers $3000 yuan (almost $500) for a ninety-minute appointment to try on dresses. Strange, how it seems somewhat viable for Vera Wang but completely misguided for the specialty food store. If the prices are the same and the retailer offers products that are not available anywhere else, they have a business model that could be augmented by services, loyalty programs and more that could easily counter the effects of those who are showrooming beyond reason. Local book stores (who are as challenged as others with showrooming as more and more consumers buy e-books), have extended their businesses into coffee shops, selling gifts, holding events, teaching courses and more. Does this offset showrooming or the digitization of their core products? It doesn’t. But, it does force them to become hyper-competitive instead of the alternative.
There is no solution.
While there will never be a solution for retailers when it comes to offsetting those who are doing competitive price checking or ordering from their smartphones, there is still a vast majority of human beings who aren’t looking for the cheapest price, but rather the best experience and help with their purchase. It is (usually) a misguided strategy to make everyone pay for the changes in an industry. An admission charge to walk into a store will only be a smart, strategic and effective move if there truly is a value in exchange for the fee. Could retailers charge a fee if there’s something more than products to look at beyond the front doors? Absolutely. Could retailers charge a fee if they’re simply worried about showrooming? Not a chance.
Would you pay to simply browse a store?