Thursday, June 27, 2013

Showrooming

After reading a couple of the articles about business model of showrooming (for example Warby Parker), it got me thinking about online shopping in general.  For consumers, there is no doubt that online shopping is easier, quicker, and more convenient than visiting retail stores.  However, with that reward comes the risk of the item not satisfying the customer and the customer having to return the item.  I think that risk and the costs associated with the risk (shipping costs, an extra trip to the post office, repacking the item, waiting on a refund, etc.) cause people to decide not to shop online.  Showrooming is an interesting concept that takes much of that risk away.  Consumers can "try before they buy" so that they are sure what they are ordering is what they really want.  I have definitely done this before with shoes.  If I see shoes I like in a retail store, I figure out what size I need, and then I find them online hopefully for less.  Although the department store is not trying to be a "showroom", that is how I use them when I have a smartphone to find the best price at my fingertips.  Amazon makes that activity even easier with their barcode tool.  I can take a picture of a barcode, and Amazon will find the item for me and many times, I can order it with no shipping charge.

The next thing I thought about was how this concept applies to the industry I'm in.  Not surprisingly, you will not find a retail store for medical devices.  Devices are sold directly, and often ordered through sales representatives.  In fact, the sales reps act as a mobile show room.  They call on clients armed with sample product, iPad demos, etc.  This seems to be the next step for a showrooming concept.  Instead of making the customer come to the showroom, find a way to bring the showroom to the customer.  Perhaps retailers could consider letting customers try before the buy.  Let's say a customer doesn't get charged for the item for one week.  If they return the item within the week, the customer is not charged.  If the customer decides to keep the item, then the company will automatically charge the customer after the one week.  This saves the consumer any concern about paying and then waiting on a refund.  It may motivate customers to order more options at once to try, and in theory, they may decide to just keep more items than they normally would if they were paying up front.

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