April 3, 2012

Mobile shoppers spur rise of ‘showrooming’

Posted by: in North America

One of the initial barriers to online shopping was consumers’ reluctance to buy something without seeing it. Shoppers tended to research products online, then go to a physical store to examine them and make purchases. But as people have become more comfortable with e-commerce, and with smartphones enabling research and shopping on the go, a reversal in behavior is under way: Shoppers are going into physical stores to examine products, then using their mobile device to price-compare, frequently completing the purchase online.

It’s called “showrooming,” and more than a few shoppers are doing it. A 2011 Codex Group survey found that almost a quarter of respondents who bought a book online first saw it in a physical store. The Pew Research Center estimates that 5 percent of mobile phone owners who bought online in the 2011 holiday period did so from a physical store after comparing prices. In the U.K., almost a fifth of in-store shoppers check competitors’ websites on their mobile, with 30 percent of that cohort saying they’ve purchased from a rival while inside a store, according to Intersperience. And a ClickIQ study found that nearly half of participants who shopped online in the past six months had first seen the product in a store; some of them patronized that retailer’s e-commerce site, but almost half ended up buying from Amazon.

Amazon is eager to encourage showrooming. Its Price Check mobile app lets shoppers scan in-store products to easily look up Amazon’s prices. A one-day holiday promotion, offering up to $5 off for shoppers who used the app in a physical store, had brick-and-mortar retailers crying foul last year. They’re starting to fight back. In January, Target asked its suppliers to create products exclusive to the retailer, thwarting shoppers ready to compare prices online. Nordstrom, already known for its customer service, now offers free shipping for in-store shoppers.

The rules of retailing have changed. Showrooming already appears to be partly responsible for Best Buy’s current woes. For the most cost-conscious consumers, physical retailers will need to add more incentives (e.g., bonus products with in-store purchase). But while online retailers have the advantage of low overhead, brick-and-mortar offers immediate gratification, hands-on customer service and, in some cases, memorable experiences. Retailing as a Third Space, one of our 10 Trends for 2011, emphasized the need for retailers to create unique experiences and environments that are only partly about shopping. Ultimately, these could make the difference between a loyal customer and one with a wandering Web browser.

Image credit: Amazon

2 Responses to "Mobile shoppers spur rise of ‘showrooming’"

1 | Will Palley

May 3rd, 2012 at 12:15 pm

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To combat showrooming, Target will now cease selling Kindle e-readers in its stores http://www.nytimes.com/2012/05/03/business/after-warning-amazon-about-sales-tactics-target-will-stop-selling-kindles.html

2 | Will Palley

July 10th, 2012 at 3:16 pm

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The New York Times outlines how big box retailers like Best Buy and Walmart are fighting back against “showrooming” http://www.nytimes.com/2012/07/05/business/retailers-lure-online-shoppers-offline.html?_r=1&pagewanted=all

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