Showrooming is a retailer’s nightmare. Cheap online deals and discounts from group buying sites and e-commerce providers are quite numerous. And some stores are afraid that these online outfits are not only eating their way into brick and mortar establishments’ revenues, but are also taking advantage of physical presence only to usurp the sale.
An example: I may be shopping for a new tablet computer and I want to get the best deal. I don’t want to order without checking out the device physically, though. I can check out an iPad at the Apple Store, getting a feel of the actual device to see if it suits my needs. Then I can head on to an e-commerce site to find where it’s cheaper. Or perhaps I can also head to another retailer to find a better deal. (Apple does implement price controls over its official retailers, but you get my point.)
Understandably, showrooming eats into a store’s business, regardless of whether it’s a gadget store, grocery store, fashion retailer, or just about any establishment. This makes store managers wary of folks carrying smartphones, as these may be browsing for product reviews or better prices elsewhere, which may make the sale difficult.
Working with retail establishments
Save22’s CEO Guyi Shen tells e27 how difficult it is to work with retail store owners, especially for a deal comparison site like Save22. He told a story of a lobangclub (Save22’s former name) user sent a distraught email, vowing to never use the iPhone app ever again. “She was shopping at a well known retailer in Singapore and found a great deal … she quickly took out her iPhone and attempted to share the deal. The store manager saw her and prevented her from taking any photos.”
As such, even if the store owner has an idea that sharing the deal would help bring in customers, there’s also the fear that the lady might be doing some comparison shopping, after all, and could be scanning the item to get a better deal elsewhere.”Even though he understood that Save22 was driving sales for him, he was very reluctant to support it. He felt that a shopper’s retailer experience is not just about the lowest price.”
Guyi says Save22 has been finding it challenging to scale with such a “love-hate relationship” with retailers. On one hand, sharing good deals can benefit retailers. On the other hand, there is this reluctance to support technologies that might eventually eat into one’s business.
“We had to find a way to have retailers advocate the shopping experience we created for consumers,” Guyi shared. With this in mind, Save22 has pivoted into focusing on deals that retailers are offering. “So we decided to digitise a retailers’ print promotions and catalogs that are normally only found in-store, and make them searchable and location aware online.”
Of course, they keywords that get the highlight here are “searchable” and “location aware.” Save22 is now directly pushing deals for retailers based on both a push and pull mechanism. Users can look for the best deals if they’re on the hunt for a bargain. They are also alerted of deals depending on their location.
Retailers are already putting up their own websites for their own deals. But Save22 goes beyond serving deals, Guyi says. “Save22 goes a step further by digitising the promotions, making them searchable, location aware and collecting them in one place, which improves a shoppers’ user experience.” In turn, retailers get the benefit of a plug-and-play channel for their deals. This allows a retailer to “drive more footfall and present a consistent branded shopping experience across multiple digital and print channels without having to invest in technology or build an audience themselves.”
Brick and mortar are still king of the retail space, Guyi says. He notes that even notable e-commerce services in the region and abroad are venturing into physical establishments, such as Groupon, Deal.com.sg and Reebonz. Guyi shares a few trends and observations in this space. Sixty-eight percent of Singapore shoppers research online before buying an item. The so-caled O2O or online-to-offline retail model makes up 30 percent of sales, and will dominate by 2020 at 65 percent.
Save22 is banking on these trends by driving offline transactions through online means, and has launched its new offering in Singapore and the Philippines just today. The Singapore-based company gets a performance fee from every successful transaction done this way. Perhaps there’s one less reason for retailers to be wary of shoppers taking photos of products they want to buy.