Showrooming you may of not heard of the term but I am betting you have personally or been with someone guilty of it. Showrooming is walking into a Brick and Mortar Store and shopping by touch and feel talking with the sales staff getting expert advice walking out and buying it online for less money. Why not, if your conservative you worry about your finance and if your liberal you love to spend someone else’s money to make your life better and call the business you just left a thief for daring to let their employee’s sleep indoors and feed their kids. Had that store not invested in that product line though you wouldn’t of bought the brand. So as fewer retailers stock, fewer sales to be had by manufactures using showrooming while claiming to be blind to its long-term negative effects.
Up till now product manufactures and investors have loved the manufacture direct to consumer capabilities of the internet but the destructiveness of it to the American economy has always been known and just considered a “deal with it later problem”. To add to the problem manufacturing in China has lead to the worlds largest Pawn shops, Ebay and Amazon. With warehouses of counterfeit goods that roll off the same exact assembly lines as the original product. Zero overhead on marketing and sales staff, no need to keep a supply chain alive and prosperous most products are considered to have short lives. Anyone who watches the Television Show Shark Tank has heard all the “experts” tell people who dream of building American jobs to strike fast before they get “knocked off”
20 years of Internet has drastically changed how consumers save money but it hasn’t replaced 3000 years of commerce. People still want experts, helpful staff, and instant gratification of it being in stock. In stock says volume about the quality of a product. A retailer has spent their money on it before you spent yours. Bed, Bath and Beyond stores have has the largest victimization of the show rooming phenomenon, with Pet Smart and Toy R Us right behind them. This makes sense being that these stores traffic in high margin products. The more margin the greater potential for instant savings from foreign actors like China. Remember the fewer products you sell the higher your margins must be and the retailer is the last in line and sells the fewest items per square foot of the entire supply chain. Stealing their margins is low hanging fruit.
The Fear of new products to the retailers because of this unique market twist has added to problems of the product launch. New companies want small retailers to buy their product and place it on their showroom floors. We have had companies walk into us and smile in our faces as they offer our store a “discount” off retail. Usually 15 to 30% because in their research against competition that is all they saw left on the bone. While Wal-mart will not place a product with less than a 50% margin. Then other manufactures just want enough small retailers to demonstrate sales for the box stores to pick up their line. Even responsible manufactures who intend to support their retail networking end up selling out once the “cloning” of their product lines begins.
Manufactures websites tried to fix this problem with store locators only they violate the internets Golden rule click to action must be less than 2. Meaning if you go over 2 clicks to get action from a customer you lose 90% of your traffic due to navigation and/or clutter. Plus its online and the top 3 listings get all the traffic so you build a 30-200 store network only to feed all your sales to 3 players and your sales staff starts giving those players discounts on volume that the manufacture they themselves created for that player. Call centers have been tried but there is no one in American who isn’t intimately familiar with talking to someone reading from a script who when you ask a question that needs expertise has to immediately get a supervisor who stands over the operators shoulder and repeats the script.
So what needs to be fixed to put Brick & Mortar back into the driving seat and making sales via that personal connection to an expert who knows why his customer bought the product.
- Live person
- Expertise-Specialty stores
- Stocking items
- Profit based on true volume not virtual volume
- Stays within web search golden rule
- Control your brand from Black Hat SEO’s
What about a phone number? A single phone number for the whole country that AutoRoute’s to the nearest location geographically instantaneously to the nearest stocking retailer. I sell Royal Purple oil but so does Walmart. Only I stock stuff for diesels and motorcycles and they don’t. Hell every auto parts store within 200 miles stocks Royal Purple oil. Because there’s synthetic and then there’s premium synthetic. I do one thing that NO OTHER STORE FOR 200 MILES DOES I stock the Royal Purple Oil filter from Harleys to Hemi’s. This means my customers gain go 12,000 miles an oil change and it cuts the cost of oil changes in HALF.
If consumers knew they could go to Royal Purples website and dial a phone number and a dealer who stocks their oil filter would answer, what would that do to my sales? It would add 150,000 customers to my reach what would that do to Royal Purples filter sales since my small shop is off the radar right now because stocking their filters is not profitable its just a convenience to the customers I care about.
Until recently no such technology existed to geo locate a phone call to what is normally an expanding database of sellers. Not only can we do that now but a store could make a purchase and have phone calls coming in a matter of minutes from their check clearing. Marketing departments and sales departments could find hot spots that NEED a location and the 70’s bread trucking model would be back to high sales and profitability.
This also put a security fix to counterfeiting and slimy manufactures who use showrooming to increase sales profit by stealing the resources of the retail networks efforts and expenditures. Retailers will demand that manufactures asking them to stock product take advantage of this technology. Holding the New Jersey and San Francisco Harbor warehouse sales accountable and being able to remove them from the Amazon marketplace.
The technology doesn’t stop there. We get text information on the customer on the retailers behalf and give them a low cost ( sub 5 cent per customer ) capability to rereach their client base with a 32% engagement rate vs the sub 2% rate of mailers at a cost of over 60 cents each. As the database grows the ability to target ads better than Google on mobile devices will be based on actual engagement versus just searches and views that had no follow through in sales. To say that this is not only the fix the American Economy that is small business oriented is looking for but is worth Billions upon billions is sales in maybe lack of big thinking on my part.
All I know is I built it because my business’s ALL my business’s need it. The Quadruple Database comparing technology is so unique that there has never been a programmer with the need to develop such technology which is what gave me this unique advantage. My development work in building record breaking Memory to CPU servers is the only hardware that is reasonably priced that can handle this massive hardware load to make the tech work smoothly on a large scale. Plus the software is designed to take advantage of my unique hardware structures.
My next step is get the funding for this on a full launch even a company as simple as Wal-mart could take advantage by having a single phone number that always had the local store answering the phone without zip code searches(zip code searches are server pigs). Even has government applications for Post office, UPS store and FedEx drop off locations. Running national television ads on new product launch or infomercials that bring product back to retail locations with all spill over in “dead zones” to a central phones. Shark Tank could make airing the number of each product and even bigger sales explosion than just hoping people don’t get their searches hijacked by a Black Hats. While the Tech is geo targeting it is not restricted by geographical locations and thus is merges the Old(retail, phone and catalog) with the New (Internet) and puts the internet into its place of filling holes and not creating them at the cost of retailers who invested in a companies products. Imagine Ford launching a new limited edition car and posting the number where to get one, but only 300 dealers in America could have one. Those dealers would pay a premium to get the latest product launch and the customer boom that is guaranteed to go with it. Truth is this tech is only limited by the small mindedness of the marketing rep you put in charge of it. It is a 3 dimensional way of looking at marketing/sales/distribution and will require the sharpest of professionals to get the most from it for their companies advantage. Manufactures could ask retailers who run websites to post the phone number on the THEIR websites keeping customer in their geolocations and prevent web race to bottom profit gouging and also find fake “authorized dealers” more quickly.
Amazon and Ebay have their place but that place is not China direct to Americans. Taking percentages on stock they don’t invest in. Amazon is a Tax on retail that only the first off the boat can afford to pay by eliminating all other costs which exist in any retail sale.
Follow me on Twitter or at LinkedIn I always have investors lurking around my projects, this one will have such a huge impact it does scare me how big its going get. I will have to weed out the money backers from strategic partners. I will be looking for a few beta companies with 300 or less locations for market tests.