How to make the most out of consumers penchant for showrooming?
Christopher Walton, vice president and merchandise manager of Target and target.com, discussed the mass retailer’s efforts to rewrite some of the rules of retailing by embracing the much-maligned showrooming phenomenon.
“It became a dirty word,” Walton said of showrooming, where shoppers typically peruse a store’s offerings then order the products online from Amazon.
“We’re thinking about it differently,” he said. “We started embracing showrooming.”
At several of Target’s Denver stores, the patio furniture department is displayed as in a showroom. “We’re showrooming an enterprise assortment,” Walton said.
To make a point about how customers are shopping when it suits them, not simply when physical stores are open, Walton asked the audience, “How many people watch ‘Game of Thrones’ when it airs on Sunday night? One person. Should we keep calling it a TV show?
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“We’re seeing the same shift across all mediums,” he added. “Our customer doesn’t care what type of sale it is. Experiences are coming together and creating almost a new channel unto itself. It’s not omnichannel, it’s on-demand. No one channel and no one experience reigns supreme.”
Walton said Target experienced its own “Game of Thrones” phenomenon in the shift of patio furniture sales from stores to e-commerce. Target examined online buying behavior in the patio furniture area and found that the best-selling products were higher-priced than bestsellers in stores. The allocation of space in stores is where “art meets the science of merchandising,” he said.
“Those products were not making it into stores,” Walton said. “We knew the category was digitally disruptive. We have to be fearless to break paradigms like showrooming. We have to test to learn. This is about taking a smart risk.”
The discovery that Target was missing the opportunity to display consumers’ favorite products has had multiple benefits, not least of which was a significant sales lift. In addition, “under the old model, stores didn’t get credit for digital sales,” Walton said. “We created a better incentive structure for store teams. We also found that the digital interaction was higher than we thought.”
Target learned from its successes as well as failures. “We had some misses,” Walton said. “We missed on seasonality. We didn’t get [ready in time for] Memorial Day.”
“We built a new concept in Denver,” Walton said. “We’ll continue to test ideas there. Next, will be furniture. No more shelves and gondola displays. We opened it up like a showroom. We’ll start offering fabric swatches. Furniture will look different in Denver. “
The Denver experience has Walton now challenging the formula of store sales in dollars divided by square footage, a tried and true measure of brick-and-mortar success. “How relevant is it now,” he said. “Store sales may not be an appropriate measure. It’s enterprise sales in dollars divided by square footage.”