Brick and Mortar Retail? How to Deal with Showroom Looki-Loos
Retail store owners are now getting a taste (and it doesn’t taste good) of a type of customer real estate agents have historically dreaded – the “Looki-Loo” “client.”
The moniker “Looki-Loo” was awarded to these unwelcome, but must serve, clients because their intention isn’t to buy – it is to only look. Those of us who’ve purchased a home using a real estate agent rightfully expect that the agent will work hard and in our best interests. If we’re selling our home we expect them to find the right buyer at the right price. If we’re buying a home we expect them to find us the right house at the right price.
Good agents put in a lot of time, effort, and expense into doing these things for us. After all, if you’re going to sell anything, meeting the customer’s needs and/or solving their problems is “Sales 101.” Real estate agents, like retail business owners, understand there are costs associated with doing business. Where things get ugly is when the costs associated with doing business are spent on clients who have absolutely no intention of buying.
However, savvy real estate agents understand that threats can hide opportunity like clouds can block the sun. For example, a shrewd agent can ID someone who shows up at an open house for the purpose of getting some decorating ideas in a hot second. Smart agents are quick to give these people the grand tour because, while the would-be interior decorator may not know it, the agents knows these people are either future prospects or they know someone who might actually want to buy the house.
This type of Looki-Loo is similar to people coming into a clothing boutique to try clothes on and don’t find anything to suit them. It would be a death knell for any future business from that customer if retail owners or employees were rude or ignored the customer. Again, shrewd retailers understand that providing exceptional customer service is what gets not only repeat business – but referral business. And, sure enough, a couple days later a customer walks in asks about, and then purchases, that cute blue sweater her workmate didn’t like, but told her would look fabulous on her.
So, if Looki-Loos can actually translate into business whether you’re a retailer or a real estate agent, what’s the problem? The problem is that there are two, very different types of Looki-Loos. The first type, which we’ve already described, is worth the cost of doing business. The second type isn’t.
The second types of Looki-Loo in the world real estate agents live in are people who see a house they are just dying to get into. They grab their cell phone and place a call to their agent – but get voicemail. Hot to see that house now, that agent’s client – the one they’ve already spent resources on working to meet that client’s needs and solve that client’s problems – simply starts placing calls until they find an agent that can get them into the house. Of course this new agent is overjoyed to have a prospective buyer, drops what they’re doing, and makes arrangements for what they think might be new client to see the house and then meets them for a showing.
Unfortunately, her heart drops when she sees the client pull out a note pad – with their first agent’s name and brokerage plastered all over it. OR, the first agent tries not to punch a wall when she receives a call that her clients made their purchase through another agent.
As a retailer you can relate. You have pretty much the same reaction when a customer comes into your store, you deliver excellent customer service by answering all their questions, demonstrate features and benefits of products that meet their needs – you can tell that the customer is ready to buy, and then, BA BOOM, they pull out their smartphone.
Real estate agents call these types of “customers” Looki-Loos – retailers refer to them as “Showroomers.”
And Showroomers are becoming more of a threat to retail business owners. There are statistics out there reporting Best Buy lost $1.7 billion (yes Billion) in revenue by their second quarter. Where do they place the blame? Acting as “Amazon’s Showroom.”
Last holiday season Amazon offered a 5% discount on any item scanned at a physical retail store. Some industry experts expect that this may become a common practice throughout the online retail sector.
Can Showrooming be Stopped?
It may not be possible to completely put a stop to Showrooming, but there are proactive steps retailers can take.
The first step is not to panic. Remember there are always going to be customers “shopping for the best deal” who will only drop their cash when they think they found it – online or at the store across town.
Second, know what not to do. There are reports that Best Buy is going to train employees to identify Showroomers, even gossip that employees will ask customers to turn off their phones. There has also been talk or retailers using lasers to interrupt cell phones signals. This type of approach is not proactive – nor is it “customer friendly.”
Target seems to have realized the best approach is a positive, proactive approach. Previously their reaction to people coming into the store to showroom Kindles was to stop selling them. Who knows how many people, finding no Kindle to check out, also didn’t check anything else out at the register when they left the store?
However, recently Target announced a more customer centric strategy – they are introducing their own app that will provide rewards such as coupons and discounts when their customer shops in their brick and mortar big boxes.
The truth is, although “everything’s changed” due to online discounters and showroomers – at the same time “nothing’s changed.” Selling doesn’t mean providing the cheapest price. Selling will always mean providing your customer a price that provides them with the best value. Continue providing that best value and your customers will continue to buy from you.
Here are a few practical examples of how to fight showrooming by providing value and creating opportunity:
- Never under estimate the power of true customer service. But you can’t just “talk the talk” – you’ve got to deliver on that promise.
- Train, coach, and mentor employees to deliver exceptional customer service. This cannot be said enough. Monitor and measure individual employee’s delivery of customer service.
- Get feedback from your customers. Find out what their experience was and whether it met their expectations. Provide incentives for customers to provide you with this information.
- Make returns easy and provide incentives to both make up for the inconvenience as well as entice them to make another purchase before they leave the store.
- Provide free shipping on any items that must be returned to the manufacturer for warranty service.
- Communicate your “easier than online” return policy to your customers. Post signs throughout your physical store. Post banners with your return policy on your store’s website.
- Follow Target’s lead and invest in your own phone app. Or how about providing a discount to any customer who owns a cell phone?
These are just a few, simple, practical ways to promote people to buy while in your store instead of using their smartphone. Showroomers are not the end of brick and mortar retail – far from it, especially when retailers approach this customer behavior from a perspective that asks:
“What opportunities come with this so-called threat?”