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Misti Miller

Misti Miller Vice President of National Accounts

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A Simple Solution to Showrooming

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Bob is on his lunch break. Lately, he has been drooling over the latest high-tech camera so he decides to make a quick trip to Best Buy to check it out. He walks into Best Buy and heads to the camera department. Once there, he finds the camera on display, but no employees are in sight to explain it to him. He picks it up, plays with it for a while and decides to buy one. With limited time, Bob rushes back to his office. As he settles back at his desk, Bob surfs over to Amazon and finds the camera to read some reviews. The glowing reviews, combined with the fact that it’s a few dollars cheaper, make him pull the trigger and order one from Amazon.

CNBC ran an article recently on the results of a new study by Gallup, “The State of the American Consumer.” In that report, “Gallup research has shown that customers only shop based on price when price is the only thing that separates competing offerings. In other words, customers shop based on price when there is no emotional connection to a particular retailer – when they are not engaged.”

Although not a new practice, “showrooming” has become a recent industry buzzword. With the increasing ability and awareness by consumers that they can price-shop dealers, many are doing just that. Cars are the second-largest purchase most people make in their lives, so it is no revelation that a consumer wants a good deal. In the past, it wasn’t as easy for a consumer to compare prices for a new car as it was for Bob to buy that camera. This has been changing with increasing speed, however. It’s not uncommon for an auto shopper to visit multiple sites – dealers’ and third parties’ – submitting inquiries for price quotes. Yet most consumers prefer to see, feel and drive a vehicle before they ultimately choose the exact vehicle. All too often, consumers will do this before they start soliciting quotes from dealers.

While showrooming isn’t going away any time soon, there is one thing dealers have that can decrease showrooming at their dealership, and that’s gauging and changing the customer’s intent. Past studies have indicated that as many as 80 percent of people that shopped for vehicles left home intending to purchase a vehicle that day. Showrooming exists because most consumers perceive same-brand dealers as being identical. Does it matter which Best Buy you visit to look at that camera? Not to most consumers. Many dealerships suffer from this same lack of personality, transforming them into merely a store that sells Ford cars. Showrooming occurs because a customer isn’t visiting your dealership to buy a car from you, they are visiting to make a decision on whether to buy a Ford … and you happen to sell Fords.

What if you could change the consumer’s intent from that of merely visiting your dealership because you sell a specific brand to coming because they want to buy a vehicle from your dealership? You can, and it’s not that difficult. Consider Cal Worthington, a dealer in Southern California. If you grew up in that area, you probably know Cal. He built his business on his personality. Many consumers in that area can still sing his catchy ad jingle. His marketing was dealership-centric, not always price-centric. In fact, when he passed away last year, it made the national news, covered by the likes of the New York Times on the other side of the country. His eccentric behavior and affinity for exotic animals made him a staple in his community. He achieved all of this through creating an interesting character that people liked. They looked forward to seeing what he would do in his next commercial.

The key to his success was marketing. He could have had the most interesting character in the world, but if consumers weren’t exposed to that character, it wouldn’t have succeeded. The dealership’s consistent branding messages and creativity across all media transformed consumer intent. They were no longer visiting his stores because he had the lowest price. They were now visiting because they wanted to buy a car from him.

Dealerships need to understand that as manufacturers push dealerships to look the same, it will become more difficult to separate themselves from their competition. If all same-brand dealerships become uniform, they will see an increasing shift in consumer perception, such as what exists with most major retailers. Dealerships will end up like Best Buys or any other major retailer. It won’t matter to consumers which they visit, only which offers the lowest price.

Dealerships need to understand that now is the time to focus their efforts on distinguishing themselves. Branding akin to Cal Worthington’s didn’t happen overnight. Creative and consistent branding delivered to consumers in a multi-channel approach will, over time, transform customer intent. Rather than having customers come to you because you sell a certain brand, you’ll find customers that come to you because they want to do business with you – and your closing rate will skyrocket.

Robert Karbaum
Not sure if closing rates will "skyrocket" from "showrooming" but it is a positive long term strategy.

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