Retailers Should Embrace Showrooming

Jan 07, 2014 1:40 PM  By

Should showrooming be keeping retailers up at night, particularly amid a competitive holiday shopping season? Is the growing practice a valid concern, or is it the unknowns, like who is showrooming, how, when and why, that are most worrisome?

To uncover the realities of showrooming behaviors in stores and learn, most importantly, whether retailers are losing sales to competitors, boosting in-store sales or simply driving shoppers to their online channel as a result of showrooming, The SeeWhy Conversion Academy conducted a series of online surveys yielding responses from more than 60,000 U.S. consumers nationwide.

In this column I share key findings and related takeaways for retailers. Our findings demonstrate that retailers in fact should not fear showrooming. Shoppers who use mobile devices for showrooming are actually almost twice as likely to purchase from the same retailer in-store or online (38.0%) than buy elsewhere (21.6%).  Let’s explore the responses further.

Mobile Device Use In-Store

Eighty percent of consumers don’t feel comfortable shopping on mobile devices, whether a tablet (80%) or a smartphone (81%).  Tablets are primarily used for researching, exploring/recreational shopping and buying. Smartphones, which offer more pocket portability and mobile data access, are used more for showrooming, finding stores and researching for later purchase on a different device. The data indicates that few actual mobile device transactions occur in stores and that showrooming is, at heart, a research practice.

Guilty Conscience?

Showrooming is more common than many might think, and few people regret doing it. About one third (33%) of those surveyed who owned a mobile device had used a device as part of their shopping process, and 12% do it routinely. Less than 5% of the total survey pool feel the practice is unfair to the retailer, and a mere 3% feel “guilty” when showrooming inside a store. The fact is, a collective 25% report having used their mobile device in stores occasionally or regularly, indicating it’s common practice for many.

Who Showrooms Most?

The most likely showroomers are young, urban, affluent men. Thirty six percent of this segment has showroomed, and they are two times as likely to use their devices routinely as part of the shopping process.

Of those acknowledging that they have used a mobile device in stores as part of the shopping process, urban populations (32%) are most likely to showroom, followed by those living in suburban areas who showroom (25%).  And the youngest shoppers are almost twice as likely to showroom, compared with those over age 65 (only 16% have showroomed).  The younger the consumer, the more likely that they have showroomed.

Upper incomes also make good use of their smartphones in stores. Consumers earning more than $50,000 are most likely to showroom. This is not surprising given smartphone ownership skews to upper incomes.

Why Shoppers Showroom

When asked about the actions shoppers took when using a mobile device in-store as part of their shopping process, the most common behaviors for the group overall were looking for cheaper prices elsewhere (35%) and reading reviews of the product (34%), followed by checking prices online for the same retailer (27%) and looking for promo codes (27%). A handful of showrooming respondents (16%) have checked the stock for an item while in stores.

However, a drilldown into these habits by gender reveals some distinct motivators.  For instance, women look for promotion codes and vouchers more than men, and men are more likely to read online reviews and then most likely to buy the item anyway while in the store.

So what should retailers do with this knowledge? Following are a few recommendations:

Offer Competitive Pricing and Superior Service ─ The consumer is a captive audience in-store, so if your pricing is competitive, whether in-store or online, and the consumer is ready to buy, you are most of the way there. To help drive the sale:

  • Ensure there is equality between your online and in-store prices.
  • Monitor online-only merchant prices and set prices at a level where the difference is offset by the cost of shipping, or close enough that the customer will be tempted to purchase in-store.
  • Give store associates the ability to price match online offers (with appropriate controls). Be careful not to make the process burdensome for the consumer.
  • Ensure your online storefront is optimized for smartphones and reflects product availability in-store, as consumers will be frustrated if they travelled, thinking the product is there, and it’s not.
  • Sales associates should easily be able to know whether the store carries a particular item, to quickly check stock levels, and to assist with an online sale from the store. Or, if the item is not carried, to suggest alternative options.

Know Your Audience and Tailor to It ─ The most affluent customers are more likely to showroom and least likely to purchase elsewhere, suggesting that all but the most price-sensitive shoppers ignore small price differences. However, these are the same savvy shoppers who frequently check reviews and look for special offers online before making a purchase. To help capture sales in the moment:

  • Ensure that your website reviews are easily accessible to shoppers in store, as Best Buy and others do using QR Codes.
  • Recognize that faster internet speeds make customers’ lives easier. Providing easy-access WiFi in-store, together with shelf edge QR codes, will encourage shoppers to read reviews while in the store and enable customers to move more quickly down the path to purchase.
  • If your demographic is primarily young, urban males, have knowledgeable staff on hand, with tablets, so that they can provide assistance for customers researching potential purchases.
  • If your business sells primarily to females, consider increasing store-based local email marketing campaigns with coupons and promotional codes, as these appeal to this audience.

Capitalize on Omnichannel – In an omnichannel world, retailers with both online storefronts and physical stores have the upper hand. Shipping in bulk to stores is markedly cheaper for merchants than individually packing online purchases. Leverage these advantages to offer competitive pricing and optimize the perks of purchasing in-store.

  • Ensure that staff know more than your customers about your products. This is easy to say but tough to achieve – but it’s critical especially when it comes to young, affluent male demographics, who may be purchasing in research-intensive categories.
  • Ensure customers are aware of your omnichannel capabilities. If you can accept in-store purchases returned online, or online purchase returns in store, make sure they know how to do this, and make the process really easy for them.
  • Thoroughly test omnichannel logistics, such as buy online and collect in store. Experience here can be patchy, and glitches can cause customers to buy online elsewhere next time if they have a bad experience.

With showrooming, it’s the multichannel merchant who need not fear the habits of today’s mobile shoppers in stores. While online-only stores can offer lower prices than their brick-and-mortar counterparts because they do not have the same overhead cost, and offer convenience, physical stores continue to attract active shoppers and of course negate potential shipping costs.  As physical and virtual shopping worlds morph, savvy retailers are making strides to embrace their target audiences and optimize all their channels to deliver a positive omnichannel experience to consumers – in turn, capturing and increasing sales, regardless of channel.

Charles Nicholls is Chief Strategy Officer of online shopping cart recovery vendor SeeWhy, and is Chair of The SeeWhy Conversion Academy.