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Scientists: in-store retail raises revenue by hiring additional staff

August 15, 2017 - 4 minute read

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Increasing the number of sales reps is the first thing an in-store retailer should do to raise its revenue. A second option is to decrease the quality advantage consumers perceive in online shopping. These are the conclusions of a scientific survey recently conducted among a large group of American consumers who are buying things online instead of in-store.

Researchers from the University of Groningen, University of Münster and Tuck School of Business wanted to examine the factors that could have impact on ‘showrooming’, which coins the tendency of more and more consumers to visit a shopping street to gather information and make their purchase online at a competing retailer. They have found that showrooming does not only occur because consumers think that prices are lower online.

Why showrooming is gaining popularity

They concluded that consumers showroom under the impression that:

  • There’s more product variety online.
  • There’s more price variety online: lower as well as higher prices. This means it is possible that showroomers could end up paying a higher price online. However, clearly consumers view the online price situation as half full rather than half empty.
  • The average product quality is higher online.

Why people are reluctant to showrooming

Furthermore, they concluded that consumers tend to showroom less when:

  • They perceive it’s relatively hard to find the right products online. This finding suggests that online shopping is not yet as easy as many online retailers would like to believe.
  • They perceive online shopping as too much additional work, after visiting the stores.
  • They expect the delivery of an online order takes too much time.
  • They think they will be quickly assisted in the store.

Can't compete on price? More staff  -26.1% showrooming

If the retailer can improve the salesperson availability, and the online price advantage is not higher than average, there’s .17 likelihood of showrooming. When the online price advantage is higher than the average, there’s .23 likelihood of showrooming. This means that even if online competitors are clearly lower-priced, the in-store retailer can still decrease showrooming likelihood by 26,1%, by increasing salesperson availability.

sales associates profit impact in-store revenue customer experience

Do not neglect in-store quality of service

Additional sales associates do not have to be extraordinarily trained. But quality of service still has to be within acceptable range”, the scientists state in their report. The consumer experience is negatively influenced by ill-informed and unfriendly personnel, as other researches show.

Furthermore, the in-store retailer has to ensure that showrooming visitors do not buy an item in a competing webshop. As online shopping will become easier and easier in the future, and as such becomes more attractive, the in-store associates also have to raise awareness around the webshop and the online loyalty programs of their employer.The researchers also warn that sales associates could be discouraged by showrooming visitors. “Perceived showrooming may lead salespersons to serve consumers worse. It’s possible that if a retailer suffers from a lot of showrooming, the salesperson may so mistreat the customer that the service-quality becomes a significant aspect and showrooming increases.

Second option: downplay the experience of online shopping

As the statistics currently suggest that not all consumers find online shopping convenient, the researchers opt that it could also be worthwhile to ‘increase perceptions of online search costs and reminding shoppers of time pressure.’

“For example, an offline retailer could mount an advertising campaign emphasizing the convenience of shopping at the store ('where we have the service you want and the product you need') and downplay the convenience of searching for better online options (for example with ad copy showing the shopper skipping from one webpage to another and cluttering her/his browser with too many websites)."

The researchers admit that while this strategy seems viable, in fact online shopping is apt to become more convenient, not less convenient, in the future. But if in-store retailers can convince their visitors to directly buy and register at their website, instead of looking for (unknown) online alternatives, this approach could still be a long-term strategy. (Photo credit: Jeff Hitchkock).

Bas van Essen

Bas van Essen

Bas was Speakap's first marketing manager. He enjoyed gaining a lot of scientific insights about the value and impact of internal communications.