Technology has given consumers the ability to be multichannel shoppers, giving rise to the showrooming phenomenon whereby people check out the merchandise in the stores, then go online and buy it elsewhere for less.
But retailers are fighting back, with data-driven tactics and other methods of getting shoppers to spend money with them.
While their budgets aren’t changing drastically, retailers are becoming more channel-agnostic as they encourage people to shop wherever they’d like–online, in stores or over the phone.
Per Kantar Media, retail ad spending rose just 5 percent to $16.3 billion in 2012 over 2010 and slightly declined in the first three quarters of 2013 versus the year-ago period, from $11.1 billion to $10.9 billion. However, retail Internet advertising grew 41 percent from 2010 to 2012, according to Kantar. As Peter Hempel, president and CEO of DDB New York, likes to say, retailers are taking a “call, click or come over” strategy.
As one example, Home Depot has banners on its physical stores inviting consumers to buy lumber online and then come in the store to pick it up. Kohl’s has introduced kiosks where store visitors can order products that aren’t available on the shelves. Similarly, if Anthropologie doesn’t have what you want in stock, the store clerk will order the item for you at no shipping cost.
Big data also has made advertising more targeted. Retailers can match mobile phone signal information to consumer information in databases, for example. “We know who you are,” said Hempel. “Sophisticated retailers like Gap, for instance, if you walk in their store, they know a lot about your profile.”
Retailers like Victoria’s Secret can mine data to determine who visits their stores but doesn’t buy a bra. They might reach those consumers through TV commercials. Then the retailer could figure out which people have purchased bras, but not many. They may lure that group with emails to spur more repeat business.
“The messaging has to be more about the brand, the offer, the product, the benefit and less about a channel,” said Allen Adamson, managing director of Landor Associates’ New York office. “While you want people to come to the store, you need to talk about the brand as an experience that you can get in three or four different channels.”