The showrooming effect is very real, as even consumers now admit to Harris Interactive in its latest poll of holiday shopping habits. Fielded between Nov. 27 and Nov. 29 among 2,249 adults, the pollster finds that 43% have tried a product in a store and then chosen to buy it online. The study is not looking specifically at mobile showrooming (as in in-store look-ups), but we have to imagine that devices are implicated somewhere in here. In fact, the main beneficiaries of the customer poaching are the two leading m-commerce entities. But we’ll get to that leg of the increasingly twisted path to purchase a bit later.
For now, let's run down the main victims of showrooming. Among those who have investigated an item and then bought it online, 24% say they do so most frequently at Best Buy. This reflects the conventional wisdom that the electronics category is most vulnerable to the practice. But interestingly, price low-baller Walmart is close behind among 22% of showroomers. Similarly, Target (9%) is another general merchandise store that is most often showroomed. The field begins fragmenting from there to the home stores Home Depot (4%) and Lowe’s (3%), and then my personal favorite place to sample wares, Barnes & Noble (3%).
The chief beneficiary of in-store demos is (wait for it) Amazon. In fact, it is Amazon in a landslide. Overall, 57% of showroomers say they eventually buy from this online goliath, miles ahead of second-place eBay.
One common theory about showrooming is that it really amount to multichanneling
that does not add up to a net loss for retailers. The argument goes that the retail brand is recapturing that in-store browser back at their site. Well, maybe not so much. Harris asked shoppers who
demoed in-store and bought online where they ended up making the buy. It turns out that 71% of Best Buy showroomers were going to Amazon, as were 64% of Walmart refugees and 72% of Target flyaways.
Only 8% of Best Buy customers were going back to that brand’s site for the purchase. Only 11% of Walmart and 12% of Target customers went to those respective sites. Apparently, once that
customer is back on the Web she is lost by the brand
easily. Harris says that all three retailers are losing more customers to other retailers online than they can recapture to their own sites.
I would argue that mobile could and should become a key element in the multichannel recapture strategy. In-store is the place where the retailer should be using the app as the bridge. If the showroomer is on a research and not a buying trip, then the app or mobile site for the retailer can either push to make the sale or make it easier for the person to research and buy from that brand’s dot-com later.
Having a "good app" is not enough for a retailer. "Good" for what context and what user mode? Is the same app that works well in your living room during prime-time browsing hours the best app for in-store experiences? A next generation of retail app will have to be situational, either detecting when and where the person is or having multiple modes. The new path to purchase has a real physical, situational dimension to it that content and interface need to address.
Moreover, retailers have to stop pretending in the stores that the smartphone and Web don’t exist. They have to use that captive audience in-store to get the customer into the digital multi-screen loop. You won’t keep people from showrooming. You need to make sure now that they can showroom with you. Give them fun things to do with their phones and apps that bring them into the loop. The retail experience will have to be multimedia and multi-device-oriented.
Yes, the denial of the Web and smartphones must come to an end. Reality check, check! And also this great article is accurate as we recently did such a thing; we love Amazon.com!
Lisa Gangadeen, President
The 33480 Group LLC
I think the study got it all backwards.
People research first on the web to narrow down a product (probably most show rooming is done on electronics, something this article does not expand upon).
Then they do the "lookie lookie" in the store to see if they like it.
Then they go to Amazon because up to now, it was no sales tax and for frequent users, free next day shipping.
Price differentials are pretty small these days between retailers for non-discounted products. So, buyers go for other services such as return policies, same day delivery, and tax avoidance.
Except for the last feature, now becoming history, Amazon has excelled in the past and knows it can compete by sheer volume.
Totally agree that retailers should be using mobile as a cross channel recapture strategy inside the store, but mobile can also be used as a proactive capture strategy just outside the store, and they can work hand in hand. For example, we're currently running a national mobile display campaign for Best Buy targeting consumers who are within a few miles of each of their 1,100+ locations. Multiple sales/offers are being promoted throughout the campaign, one of which is their "Price Match/Low Price Guarantee" that (during the holidays only) offers to match the prices from designated online retailers (Amazon was listed first) for appliances and CE products sold in store. New customer locates product in store, finds a BlueShirt and shows the Amazon price - purchase made and showrooming averted!
(why)amazon listed first? mobile apps are still in the design stage. We recently designed our mobile app, but had a situation when it came to redirecting your viewers. If we could focus on less distraction and become more orderly from start to finish, your profits should grow.