Spaaza ‘MyPrice': A New Response to Showrooming

Screen Shot 2013-01-18 at 5.24.13 AMOver the past holiday season the revelation for many people was the degree to which mobile devices were used as part of the consumer shopping and purchase process. Big box retailers and specialty shops are now scrambling to figure out how to combat “showrooming,” which is merely one powerful trend in a changing landscape of consumer shopping behaviors.

We’re now in a true multi-channel, multi-platform environment in which consumers move fluidly between devices and screens, doing research on one and purchasing on another. The ability of most retailers to effectively respond to these behaviors appears to be limited. Indeed, most never responded to the simpler “research online, buy offline” pattern that emerged over the past seven or so years.

There are now several complementary strategies to deal with showrooming:

  • Improved in-store service, with better-trained sales staff
  • More effectively using social media channels to deliver better service and information to customers and prospects
  • Loyalty and reward programs that support ongoing purchase activity (regardless of channel). As an aside, loyalty platform ShopKick just announced that it was profitable and drove more than $200 million in sales for retail partners in 2012.
  • Use of technology (e.g., interactive displays) and mobile apps for improved in-store experiences and access to information (e.g., pricing, product info)
  • True agnosticism about whether purchases are made online or in stores (“showroom yourself”)

Another compelling addition to this list may well be “personalized pricing.” This is a novel strategy being tested by a European company called Spaaza on behalf of several retail partners.

Spaaza personalized pricing

Spaaza is a consumer-facing company and app, but aligned with retailers and seeking to help them provide better shopping experiences as well as combating showrooming. Spaaza has a number of products but I’m most intrigued by what the company calls “MyPrice.”

Each product in the stores where Spaaza is testing MyPrice has a posted price and a QR code (image above). MyPrice is variable and depends on a number of variables. Business rules are established by the retailer partner. Nobody pays more than the “official” price but different shoppers pay different prices based on who they are and their purchase histories.

Users scan the codes to see their MyPrice and retailers get to see what products have been scanned. This provides valuable information about popular products, as well as matching product demand to audiences. There are other data as well. For example retailers can A/B test pricing. They could also test positioning of products within stores — and so on.

The scanning generates all sorts of valuable feedback. Indeed, there are all sorts of marketing, pricing and inventory implications. Currently retailers in Amsterdam and South Africa are testing the service.

I think it’s quite intriguing and holds great promise for traditional retailers and their effort to combat Amazon and showrooming. And while Spaaza is a consumer app I would imagine the company could be persuaded by large retailers to white label and license the MyPrice capability.

You can follow any responses to this entry through the comments feed.

3 Responses to “Spaaza ‘MyPrice': A New Response to Showrooming”

  1. Electrician says at

    Hi Greg, in your list of ways to avoid showrooming I think you missed one big trick that the large retailers in Australia use (and I have no doubt that the US retailers do the same) ….

    They request “unique” products from the manufacturers. Products that have a product name only available in that store, or a exclusive colour for that product, etc.

    This way, when a consumer try’s to showroom they cannot find the same product available anywhere else.

    Its a dirty trick, but used extensively.

  2. Greg says at

    Yes, you’re correct.This is a strategy that is widely used. I encountered it today in fact looking at mattresses. However it does not thwart the determined consumer.

  3. PamIE says at

    I think that in order for big box retailers to be more competitive with online retailers, they need to have better prices. People are using apps on mobile devices to search for better deals knowing that better deals on the internet do exist and they almost always do. If retailers can offer incentives for people to buy in the store such as Bed Bath and Beyond’s 20% coupon then these companies will have a better chance of surviving showrooming.

Leave a Reply