Survey Finds 80% of Retailers Expect 5% Loss From Showrooming

by , Nov 19, 2012, 8:10 AM
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Smartphone-ShoppingOpinions among marketers and analysts vary about whether and how in-store use of mobile phones to look up products and make price comparisons actually affects the bottom line among brick-and-mortar stores. But the retailers themselves certainly seem to think that “showrooming” is real. In a survey of 59 retailers by Edgell Network and eBay Local, 80% said they expect this phenomenon to impact their bottom line by an average of 5% in sales.

While the sample was limited, they represented a wide range of non-grocery retailers, from apparel to furnishings, electronics to general merchandise, with 70% reporting overall revenues of less than $1 billion. But opinion among the merchants was resolute. Nine in ten of them had heard of “showrooming” and almost all insisted that it was affecting their business. Oddly, 49% of retailers said they were not prepared to counter or embrace showrooming, although they were monitoring it. Only 12% claimed to have a strategy in place.

Price matching emerged as the most effective strategy for combating any negative effects of showrooming, according to 60% of respondents. But 38% regarded in-store pick-up for online orders as effective, while 33% cited creating consistent cross-channel experiences for customers. Providing salespeople with real-time information (31%) and offering more exclusive products available in-store (29%) were also seen as important counter-measures.

Only 10% of retailers said that providing a store-branded mobile app of their own was an effective counter-measure -- even fewer than the 12% who would felt that creating technical barriers against barcode scanning would work.  

The merchants see the showrooming phenomenon affecting different segments to various degrees. While 100% of respondents felt showrooming impaced the electronics and appliance category, only 35% expected an impact on apparel, 45% on home furnishings, 47% on books and music and 63% on sporting goods.

Despite high levels of sensitivity to showrooming and their customers’ use of mobile phones in-store, a relatively small share of them seem prepared to recapture that activity with their own strategies. The survey finds only 25% of respondents have total integration between their Web sites and stores, such as shared inventory. Only 34% said there was some integration between digital presence and the physical stores. But 15% of retailers said they do not have any integration while another 25% still don’t offer any online sales channel.

Curiously, and despite the actual lack of cross-channel readiness, 84% of the retailers claim they are “technologically prepared” for the coming holiday shopping season. In another example of a disconnect between sentiment and reality, the survey finds almost 80% of brick-and-mortar stores claiming that sharing inventory across store and Web is somewhat or very important, yet 84.6% of retailers do not have this feature.

On the bright side, 62% of the retailers asked expected a stronger year than last for overall in-store sales, while 83% predicted a rise in online sales. Half see their mobile sales going up this year as well.  

Edgell Network recommends that retailers fully engage the showrooming effect, even to the point of training salespeople to identify shoppers exhibiting this mobile behavior in-store so they can be approached with offers. The salespeople need the latest pricing information to make counter-offers. They need to understand and perhaps work with the very third-party apps that consumers are using to compare prices. And retailers need to enhance the value and the experience of bricks and mortar as they also ensure that inventory is accessible online and to key marketing partners so consumers anywhere can find it.    

1 comment on "Survey Finds 80% of Retailers Expect 5% Loss From Showrooming".

  1. Axel Kuhn from epathconsulting
    commented on: November 21, 2012 at 12:36 p.m.
    Excellent article, Steve! Seems like "showrooming" using mobile is an unstoppable trend. It's really empowering for consumers. Unfortunately "price-matching" is not a long-term, sustainable strategy for retailers. Retailers need to master their online/offline customer experience. Lots of opportunity to tie into the "technology enabled retail" trend by actually adding value and differentiating themselves beyond price. I've piggybacked on your post with this post (albeit with a Canadian focus): http://ebusinessconsultants.ca/2012/11/ecommerce-strategy-in-canada-wheres-the-innovation/

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