Between showrooming and astroturfing, there are many people and organizations creating smoke screens in an effort to gain a competitive advantage in the particular games they're trying to play. These phenomena are especially important to be aware of as the holiday shopping season approaches. Both trends are fairly damaging to commerce, but for admittedly different reasons. However, the underlying practice is deceptive.
What Showrooming Will Likely Mean for You On one hand, you have businesses attempting to use the digital revolution to their advantage using the Internet to hoodwink consumers into thinking online reviews are 100 percent genuine. On the other hand, consumers are acting out a similar charade with retailers, taking advantage of the proliferation of mobile devices to beguile businesses into believing their intent is to purchase an item or pay for a service, when in reality, the goal is to simply scope out the merchandise to validate the quality. Both parties are equally guilty in this scenario, but which group is doing the most harm?
According to Business Insider, the effects of showrooming have been staggering. Citing Deloitte Digital, BI indicated smartphones influenced $159 billion in sales in U.S. brick-and-mortar locations during 2012. Although that reflects just 5 percent of total sales, mobile technology is predicted to impact nearly $690 billion of store sales in 2016. As suggested before, the holiday shopping season is prime time for the activity, as many consumers have a limited budget to shop for gifts and related items.
As a result, the highest quality item for the lowest cost will be put at a premium. According to the International Data Corporation, an American market research and advisory firm, an anticipated 59 million U.S. shoppers will use their smartphones to comparison shop during the fourth quarter holiday season in 2013. That means a significant number of shoppers will enter a retail location with the sole purpose of looking at products without purchasing. In reality, this should probably make businesses slightly nonplussed. This doesn't mean companies are helpless; in fact, it gives retailers a tangible advantage.
What You Should Do About it A large portion of effort goes into bringing customers to a physical location where the business has the advantage in many ways. With highly qualified and charismatic sales representatives, an enterprise has the consumer in the precise position to convert the sale. Most consumers showroom because they don't have all of the information necessary to make an informed decision on a purchase, and your sales reps have the distinct opportunity to give the them the information needed to push them in the direction of making the purchase. Moreover, mobile technology can work in retailers' favor as well. For example, BI reported electronics superstore Best Buy began matching the prices of 19 e-commerce competitors in March 2013. Similarly, Target has instituted a similar policy to keep shoppers from looking without buying.
The Damaging Consequences of Fake Consumer Reviews That leaves us with the other half of the equation: astroturfing. Bloomberg Businessweek reported New York State Attorney General Eric Schneiderman worked a sting operation to expose 19 businesses that had knowingly commissioned writers to post fake online reviews of company products and services to help them offset the negative reviews they had accumulated. This practice is actually illegal, in addition to lacking ethics. Well-known sites such as Yelp and Google Local were victims of this practice, but the cost to consumers is even more difficult to calculate.
It's easy to see the effect of online reputation on the companies themselves, but the strength of the chord that positive reviews strike with consumers is an indicator of the influence fraudulent posting will likely have. Citing a study conducted by Dimensional Research, 90 percent of shoppers said their buying decisions were influenced by positive online reviews. Nearly an equal number were impacted by negative ones.
In reality, the best policy for any business is transparency. As the digital age progresses, there are fewer screens to hide behind anyway.