10 Tips to Help Retailers Handle the Showrooming Challenge

Overcoming ShowroomingBy far, the number one topic that I am asked to comment on by our retail sales and marketing consulting clients is how to handle the problem of becoming a showroom for aggressive price-oriented on-line retailers like Amazon, Buy.com, or others.  Now, the issue is not just one for specialty retailers, but even the big national chains are being impacted by this issue.  Many pundits are saying that this is the biggest challenge to the survivability of retailers ever!

While the issue of dealing with price competition is not a new one – after all, specialty retailers were confronted with the challenges from Wal-Mart and other big box retailers in the 90’s and 2000’s and independents were confronted with this issue from chain stores prior to that – it is a critical one that must be confronted and dealt with quickly.  The worst thing that any retailer can do is waste time through inactivity or over analyzing the situation.

With that in mind, here are ten quick tips that you might be able to put to use in order to help your retail business compete in the worlds of smartphone shopping applications:

1. Check the Online Prices for Key Products Every Week – Sometimes Amazon and other retailers actually raise their prices.  When they do, so can you!  Plus, your pricing does not always have to meet or beat Amazon’s price… you just have to be within 20-25 percent.  After all, the customer has already invested time and money in driving to your store…do they want to spend more on driving back, paying for shipping, and waiting for the product to arrive?

2. Know What Your Gross Profit and Gross Margin Requirements Are – On bigger ticket items you may be able to live with a lower margin because the gross profit dollars will cover your costs.  Additionally, you likely will not need to price match on all items, but only on enough items that let you speak to being competitive with online retailers.

3. Keep Popular Products in Stock / Create Urgency in Your Presentations – When customers are shopping they generally would prefer to have their product sooner rather than later.  Therefore, make sure that you talk about how your customers can benefit from the product TODAY!  On the other side of the coin, if you are out-of-stock, you are encouraging customers to shop elsewhere.

4. Keep Your Assortment Fresh and New – Many inline retailers are followers.  They will not buy deeply or promote products until they see a history of sales from the vendor.  Therefore specialty retailers can get an edge by selling new products for full price early in the product lifecycle!  Having new merchandise also gives your customers a reason to return to your store frequently.

5. Give Your Store Regular Facelifts – Changing displays every few weeks is another way to encourage customers to return to your shop on a frequent basis.  After all, they will want to see what is new and exciting!

6. Educate Your Staff – By providing retail sales training and regular product training your team members will be better able to close sales, add-on, and answer questions for your customers.  According to a recent study by Rightnow Technologies,  66% of retail consumers said that they will spend more money if they receive a quality customer experience.  The key is differentiating yourself from the competition by providing answers and complete solutions.  If you rely solely on price the big guns will beat you due to their buying power.

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7. Leverage Social Networks and Marketing Tools to Listen to Your Customers – Utilize Facebook, Twitter, and other social networking sights to understand new trends in your business segment.  There are thousands of user interest groups and websites devoted to product segments from fashion to hobbies, to electronics.  By keeping an eye on them you can anticipate their needs and buy/price your merchandise accordingly.

8. Ask Your Vendor and Distributor Representatives for Assistance – Having been a vendor myself, let me assure you that vendors want to maintain a diverse pipeline for their products.  While they may not always be able to assist with the cost of products, they may be able to assist with display materials, co-op advertising, and alert you to special buys.

9  Ask for the Order Early and Often – Time is money, and one of the best ways to determine if a customer is using your store as a showroom (and wasting your time) is to quote your price early and ask for the order.  If they are not in a buying mood it will quickly become apparent and – assuming you have other customers in the store – you can move on to greener pastures.

10. Sell the Value of Your Personal Service During the Presentation – Retailers have had to confront price competition for generations.  One of the best ways is to confront it head-on by using great selling techniques.  Present your service and your store as a feature and benefit of your product and then use a “tie-down” question to get the customer to agree that this is worth additional investment on their part.  For example:  “One of the great benefits of investing in this product is that you will have local support from me personally.  It costs a few pennies more, bust most of my customers feel it makes sense.  By the way, my name is John and I am always here for you…If you ever have an issue, you would come and see me personally, wouldn’t you?”


Would you like to learn about other ways that you can improve your retail business results?  Let the Retail Advocacy Group and Retail Training Services assist you with implementing a great retail business plan.  Contact us for a free one-hour consultation and needs assessment!


–          David Goodwin is the Principal of the Retail Advocacy Group.  As a 30 year veteran of the retail industry he operated hundreds of retail locations, launched his own retail businesses, and managed retail channels on behalf of Fortune 50 companies.  Retail Advocacy group offers consulting services for retailers and also offers retail training solutions through its Retail Training Service subsidiary.   You can learn more about instructor-led, e-learning, and other training solutions for retailers at www.retailertrainingservices.com.