Growing Impact of Showrooming on Retail Businesses

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Impact of Showrooming on Retail Businesses

 

Showrooming | noun | showˑroomˑing – The act of visiting a store or stores to examine and try a product before buying it online for a lower price. Ex: “As more consumers are showrooming, e-commerce is now a direct threat to brick-and-mortar retailers.”

Back in the day, before the internet was such a big deal, consumers would visit retail stores at the mall to walk around first, window shop and then decide what they want to buy all in the same outing. The options they had for products were limited to the local retail storefronts they visited, or an employee would have to call another store to see if the product was available in another location.

 

Changes in Retail Showrooming

 Now, consumers can not only search to see where a product is available, they can find hundreds of other retailers online on their mobile device that sell the same product and usually find it at a lower price. And all of that can happen within seconds at their fingertips from their mobile phone.

 This is especially true if the product is large (think mattresses or a new kitchen table) or rather expensive in cost (like a name-brand watch or pair of sunglasses). In cases like these, consumers want to know exactly what they’re getting before they buy it. Thus, they partake in showrooming to feel more comfortable with the purchase they’re about to make, albeit at a lower price.

Is Mobile Friend or Foe In Retail Showrooming?

 If you run a brick-and-mortar retail store and you think mobile is your friend, then think again. Some cons of a customer showrooming via mobile devices include:

  • Having quick access to other retailers who may be offering the same product at a discounted price
  • If your store doesn’t provide as much product information as other online retailers, your customer may think that your product is somehow subpar (even if it’s exactly the same)
  • If other stores make the product easier to buy online, that’s what your customer will likely do…from them

 

This doesn’t mean that customers showrooming on their mobile devices is entirely bad. There are actually quite a few benefits associated with mobile retail showrooming, some of which include:

  • Showing the customer up front that you have the lowest price
  • Giving you the opportunity to engage the customer in an informed conversation if you notice they are searching competitors’ sites, hopefully resulting in a sale thanks to your great customer service
  • Creating such a positive online experience for your customers while they’re showrooming that they don’t want to go to any other retailer

 This means that mobile is your frenemy – that’s your friend and enemy. It could work for or against you; and that’s going to be up to you.

showrooming

Source: TomFishburne.com

Showrooming and Consumer Demand

Consumers’ demands for cross-channel and omnichannel marketing are increasing. Not only does this open doors to endless possibilities for businesses to market their products to consumers, but it also gives multiple competing retailers the opportunity to also reach customers.

 According to a SecureNet study, over 50 percent of Americans use their mobile devices to research a product online while they are in the store. That number increases to 68 percent among the 18 to 29 year old demographic, and increases again to 72 percent for the 30 to 44 year old group.

App Creation for Easier Retail Showrooming

 One way that online retailers are making the most of today’s mobile showrooming trend is that they are now creating apps to make showrooming from an electronic device easier. For example, one leading online retail company has launched a price-checking app that offers 5 percent off any item that is scanned if the item exists on their site. Price-check mobile applications are making the showrooming process faster and easier.

 Other retailers have created apps which enable the user to compare and contrast various products contained within their stores. This helps consumers make a more informed decision while keeping them engaged with their specific store, increasing the odds that they’ll choose to do their business there.

 

Electronic and Appliance-Based Showrooming

 Electronics and appliances are among the most showroomed categories. Over 60 percent of consumers who are shopping for these types of products are using their smartphones on a regular basis. They tend to know and understand technology more than the average person, allowing them to fully research their options. For this reason, showrooming is very popular. Electronics and appliances also tend to be high-cost, leading to consumers looking for cheaper possibilities.

Best Buy had a decline in its brick-and-mortar sales and it blamed the issue on showrooming. In order to combat the showrooming customers, Best Buy offers shoppers the lowest price for products regardless if they are shopping online or in-store.

 

Showrooming and Product Price

Online price-matching is certainly part of the buying process. Many major retailers in the United States price match their main online competitors. However, not all major retailers will match to every online retailer.

Before over 50 percent of the adults in the United States owned a mobile device – smart phone, tablet – online and in-store sales were disconnected and uneven. Consumers began to test out the ability to order the same, or similar, products from online retailers and it has only become a new way to shop.

Technology – specifically mobile and digital marketing – is changing the retail game. And consumers are getting more accustomed to the changes, expecting retailers to also keep up with the times and provide them with a smooth shopping experience.

 

Showrooming is a direct result of these advances in technology and changes in consumer behavior. The growing showrooming trend is initiating a change in the way the retail industry is functioning and how it will operate in both the near and far future.

 


Cecillia Barr

Cecillia Barr has a bachelors of science in business administration degree in marketing from the University of Central Florida. She is known for covering personal and business finance and debt solutions. Connect with Cecillia on Twitter.

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