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. 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.

If you run a brick-and-mortar retail store and you think mobile is your friend, then think again. 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

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.

Online retailers are now creating apps to make showrooming easier. 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.

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.

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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