Unscrupulous local traders accused of swindling customers by stealing their business advice - Consumers connecting with local traders equipped with consultation expertise
In the digital age, price comparisons are ubiquitous, but a concerning trend for local retailers is showrooming—the practice where customers visit physical stores to try products, only to purchase them online at lower prices. This phenomenon is particularly prevalent in Germany's running shoe industry.
Petar Punjek, the manager of a running sports store in Karlsruhe, has expressed his frustration with customers who seek his advice and then buy the shoes online elsewhere. He has even put up a poster near the entrance of his store, reading: "Good advice has its value. Unfortunately, we often observe that customers take photos after an extensive consultation and then order the shoes online."
According to a survey, about one in three consumers in Germany has sought advice in a physical store and then bought the product online after comparing prices. This behaviour, known as "showrooming" or "beratungsklau" in German, is common in the retail industry.
Stefan Genth, the CEO of the German Retail Federation (HDE), shares a similar sentiment. He acknowledges that the reverse phenomenon occurs more frequently, where customers inform themselves online and then buy in-store. However, he emphasizes that customers decide where they want to inform themselves and where they want to shop.
The impact of showrooming on local retailers can be significant. Reduced in-store sales occur as customers use local shops primarily for product trials but buy from online competitors. This puts pressure on local retailers to compete with online pricing, which is often difficult for smaller shops due to lower overhead for e-commerce.
In an attempt to differentiate themselves, local stores are increasingly focusing on the customer experience and service. Some retailers are offering exclusive in-store services, loyalty programs, or integrating online and offline sales channels (omnichannel approach) to attract and retain customers.
German consumers are generally digitally savvy, and the growing penetration of internet and mobile technology further enables showrooming practices, impacting traditional retail, including the specialized market for running shoes.
However, specific data on the impact of showrooming on local retailers in Germany, especially within the running shoe industry, is scarce. For detailed and current data specific to Germany’s market or running shoe segment, consulting German retail trade studies or industry reports would be necessary.
Despite the challenges, Punjek remains hopeful. He estimates that around ten percent of customers who seek advice and are informed, then don't make a purchase. This, he believes, is a testament to the value of personal advice and service, which he continues to provide, despite the digital age.
- Local retailers in EC countries, such as Germany, are finding it challenging to compete with online businesses in the market of vocational training, as customers frequently visit their stores for advice and then purchase the products online at more affordable prices, effectively showcasing the products in physical stores while finishing the transaction online, a phenomenon known as showrooming.
- To counter the impact of showrooming on their businesses, EC retailers are increasingly prioritizing customer experience, service, and offering exclusive in-store services, loyalty programs, or integrating online and offline sales channels (omnichannel approach), aiming to attract and retain customers, highlighting the importance of lifestyle and personal finance in this new business landscape.
