3 Things Online Retailers Need to Know About

Mobile Showrooming This Holiday Season

JIntroduction

3 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

IntroductionRetail executives often shudder at the thought of “showrooming”—customers visiting brick and mortar

stores to try on, touch, and feel products before leaving the store to buy the same thing online. These

fears are not unfounded. Showrooming often leads shoppers to a cheaper price from a competitor. Plus,

with some estimating that 20 percent of online sales take place on mobile devices, customers do not

even have to leave the store to buy from a competitor. This sounds like the beginning of the end for brick

and mortar shops. Fortunately, this mobile shopping companion phenomenon presents savvy retailers

with a generous opportunity to grow both online and offline revenue this holiday season.

Several years ago, some brands tried to ignore the impact of social media on consumers. Eventually, it

became apparent that either a brand purposefully manages their social media presence, or the public

will manage it to their liking. Similarly, we are past the point of no return on the mobile showrooming

influence of shoppers’ in-store purchases. Customers of all ages are using mobile devices to augment

in-store shopping. More than two-thirds of Baby Boomers aged 54-plus and an astounding 97 percent

of those from Generation Y (ages 18–29) report using mobile devices to aid in-store purchases. Either

brands must optimize their mobile showrooming experience or competitors will do it for them. So, how do

retailers gain a competitive advantage with mobile showrooming? There are three angles to tackle:

1. Facilitate in-store purchases

2. Enable mobile purchases for in-store customers

3. Win sales from competitors

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Revenue generation from native mobile apps verses the mobile web varies substantially by retailer. However, all retailers need at least a minimally viable mobile site or they risk losing sales. This eBook will focus on mobile site optimization.

Facilitate in-store purchases

i

5 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Even when customers intend to make an in-store purchase and are not

deliberately showrooming, shoppers use their mobile devices. If a retailer’s

mobile presence fails to aid the in-store experience, there is an opportunity

for a competitor to swoop in and steal sales.

Make check-out easier without waiting in line.

Mobile wallets and digital payment methods have been around for years.

However, the highly anticipated release of Apple Pay takes digital payments to

a whole new level: Apple Pay is fully integrated into the iPhone 6 and allows

users to pay in-store, directly from their phones with one touch and without

even opening an app. With this new feature in mind, retailers can make the

shopping experience easier for customers by supporting purchases via digital

wallets. The second largest grocery chain in the United Kingdom, Sainsbury’s,

has extended its trial to let customers scan items directly from their carts

using their mobile devices. Mobile self-checkout could potentially throttle

back lost sales opportunities in cases where cashier lines are long during peak

shopping periods like Black Friday.

Make items findable.

Stores like Macy’s are using GPS technology to help in-store shoppers

find items. This practice not only alleviates customer frustration, increasing

likelihood of a purchase, it also reduces strain on busy holiday staff.

In preparation for the holidays, savvy retailers are leveraging mobile technology such as in-store GPS and electronic payments via in-cart checkout through the shopper’s mobile device.

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6 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Make store locations findable from the mobile site.

The most basic way mobile devices aid in-store purchases is by making it easy for people to find stores in

the first place. Retailers’ mobile sites should consider prominently featuring a store locator or dynamically

display the store location that is closest to the customer. There are some tradeoffs: more prominently

featuring the store locator above the fold instead of, for example, a product search bar could detract

from online mobile sales. Fortunately, with services like Kaizen Platform, page variations can easily be

created and tested without employing expensive internal web development resources. Brands should

test rigorously until an appropriate balance can be struck between generating mobile sales and directing

customers to stores.

Make the store findable from search engine results.

Ensure that Google My Business (formerly Google Local) and Bing Places for Business accounts are up-

to-date with accurate addresses, store hours, and phone numbers. To garner additional store foot traffic,

pay for placement within local or map search results.

O$Enable mobile purchases for in-store customers

8 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Why would brands want to facilitate

online purchases for customers

already in a brick and mortar store?

Because customers will consult

their phones to price shop the

competition whether or not the

retailer encourages in-store mobile

shopping. It is better to lose an

in-store sale to a retailer’s own

mobile site than to the competitors’.

Wal-Mart embraces this: It recently

released the app Savings Catcher,

which aids customers with price

comparison shopping among other

things.

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MOBILE

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3 WAYSGROWS SALESSHOWROOMING

STORE

MOBILE

SITE

kaizenplatform.com

BUY NOW

Wins sales from competitors

COMPETITORSTORE

STORE+

MOBILE

SITE

Facilitates in-store purchases

2

3

1Enables mobile purchases for in-store customers

9 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Facilitate existing in-store mobile behavior.

Customers are using various mobile apps and sites to create

and manage shopping lists, find gift ideas, share purchases,

obtain discounts, comparison shop, read reviews, consult

their spouses, and more. Retailers can take advantage of

this behavior by building functionality into their mobile

experience that supports these activities. If customers

become dependent on a brand’s site to manage their long gift

shopping lists, keep track of coupons, and find the best deals,

that brand has a huge advantage over the competition. Given

the increased workloads that occur around holidays, most

in-house development teams require long turn-around times

for mobile site optimization. Retailers can turn to full-service

providers like Kaizen Platform to develop and test new site

functionality during busy seasons.

Retailers can design their mobile site to serve as an indispensable shopping concierge service that customers become dependent on to make their in-store shopping experience more efficient and pleasant.

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10 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Be visible in Comparison Shopping Engines (CSEs) on mobile devices.

CSEs (Such as Google Shopping) are a critical part of any retailer’s strategy. Global CSE campaign revenue

grew by more than 400 percent from 2012 to 2013. This holiday season, customers will be turning to

CSEs on their mobile devices while in stores to look up alternative products and price shop. With the

recent switch from Google Product Listing Ads (PLAs) to Google Shopping Campaigns, retailers can now

set bid multipliers to increase visibility to customers on mobile devices who are physically located near a

store during store hours.

Optimize the mobile shopping and check-out experience.

Having an easy-to-use mobile site is key to preventing the competition from siphoning sales from mobile

showrooming. If a customer finds the site difficult to use, they will quickly find another more user-friendly

place to buy what they are looking for. By using a service like Kaizen Platform, retailers can iteratively

test different mobile site conversion paths and page designs to achieve just the right experience.

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)Win sales from competitors

12 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Keep in mind that customers are not just showrooming in one store—they are

employing this price-shopping technique in all stores. This provides opportunistic

retailers with the chance to get in front of customers who are physically standing inside

a competitor’s store.

Test highly geo-targeted paid media competitor campaigns.

Consider, for example, that REI (Recreational Equipment Inc.) and Cabella’s are co-

located in the same town. REI could run a paid search campaign using radius targeting

and mobile bid multipliers to attract the attention of customers in and around Cabella’s.

REI could bid on keywords such as “Cabella’s store location” and “Cabella’s directions”

to generate more foot traffic. REI could also bid on product keywords for Cabella’s

top-selling items, directing users to REI for discount coupons, special events, or other

compelling offers. Furthermore, REI could use Google Remarketing Lists for Search

Ads (RLSA) to remarket REI ads to users near a Cabella’s store who have searched for

Cabella’s product name keywords such as “Cabella’s camping gear.” For best results,

REI would optimize the landing pages for these paid media campaigns, perhaps testing

content such as competitor comparison charts.

A well-played competitive mobile showrooming strategy can be used to acquire new customers who may be located in or near a competitor’s store.

13 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

Test different site variations for customers physically located in or near a competitor’s store.

If a customer is visiting the PrAna mobile site while in proximity to

a Lululemon Athletica store, chances are good that the customer is

comparison shopping. PrAna stands to win a new customer away

from Lululemon by creating a compelling, competitive mobile site

experience for these site visitors. A system like Kaizen Platform

allows brands to segment site visitors by physical location and

dynamically serve different content. For example, brands can deploy

variable prices or product comparison charts to users visiting the

mobile site within the vicinity of a competitor’s store. In one form or

another, variable pricing online has been around for years. In 2012,

the Wall Street Journal noted that Staples adjusted online prices

based on user proximity to a competitor store. With enhancements in

mobile geo-targeting and segmentation, retailers have an improved

ability to execute strategies like this.

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%Conclusion

15 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

ConclusionMobile showrooming is a reality and here for the long-haul. Retailers can either lose sales to

in-store mobile comparison shopping or win the customer engagement game with a superior

mobile site experience and competitive mobile showrooming strategy. Mobile behavior

indicates that customers want their mobile devices to serve as a shopping companion or

concierge service. Brands can leverage this to boost online and offline revenue by achieving

a superb mobile site experience.

Retailers can win new customers and engage with existing customers by embracing and optimizing the mobile site experience to serve as a companion to the in-store experience.

16 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

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17 3 Things Online Retailers Need to Know About Mobile Showrooming This Holiday Season© Kaizen Platform Inc. All rights reserved.

ReferencesFiegerman, S. (2012). Macy’s Flagship New York Store Gets Indoor GPS Navigation. Mashable.

Retrieved from http://mashable.com/2012/11/08/macys-indoor-gps/

Kenshoo (2013). 2013 Global Online Retail Seasonal Shopping Report. Kenshoo.

Retrieved from http://www.kenshoo.com/2013globalshoppingearlyedition-2/

Norton, N. (2014). Survey: Older Generations Embrace Mobile As Local Shopping Companion. Search Engine Land

Retrieved from http://searchengineland.com/survey-older-generations-embrace-mobile-local-shopping-companion-188870

Poulter, S. (2014). Pay by phone to skip the check-out queues: Sainsbury’s to extend trial that allows customers to pay using iPhones or rival handsets. The Daily Mail.

Retrieved from http://www.dailymail.co.uk/sciencetech/article-2751405/Pay-phone-skip-check-queues-Sainsbury-s-extend-trial-allows-customers-pay-using-iPhones-rival-handsets.html

Reda, S. (2014). Jingle Bells in August. IBM Digital Analytics Benchmark.

Retrieved from https://nrf.com/news/jingle-bells-august

Strout, A. (2014). Wal-Mart’s New Savings Catcher: The Killer App. Marketing Land.

Retrieved from http://marketingland.com/Wal-Marts-new-savings-catcher-killer-app-95993

Weinstein, M. (2014). 3 Google Shopping Campaigns Features You’re Not Using Correctly. CPC Strategy.

Retrieved from http://www.cpcstrategy.com/blog/2014/04/3-google-shopping-campaigns-features-youre-not-using-correctly/