The Impact Of ‘Showrooming’ In Retail

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There is a new word floating around in the wonderful world of retail and that is “showrooming.” In case you have not heard about it, allow me to explain. Showrooming is the practice of researching a product in-store and then buying it elsewhere, most likely at Amazon.com or eBay. With the increasing proliferation of data-enabled devices such as smartphones and tablets, showrooming is becoming a legitimate concern for most retailers. In current times, when money is tight, consumers want to stretch their dollar as far as possible and are always on the lookout for the best prices.

Recent studies have confirmed that the number of consumers who check prices while in retail stores using mobile devices is on the rise. Showrooming is becoming very, very popular. According to a Pew Research survey during the 2011 holiday shopping season, 52 percent of shoppers went into brick-and-mortar stores and did some product research on their cellphones, and unfortunately for retailers, 19 percent of those people ultimately made their purchases online. The study also revealed that 25 percent of shoppers used their cellphones to look up the price of a product online while they were in a store to see if they could get a better price somewhere else.

To combat showrooming, retail chains such as Target are proposing that vendors ship chain-exclusive SKUs that will make it less easy to compare prices. Retailers like Walmart and Best Buy are already offering an increasing number of store-exclusive SKUs. According to Gap Intelligence, Walmart’s store-exclusive digital camera assortment increased from 5 percent of its total lineup in October 2011 to 14 percent as of last week. To help discourage showrooming, Best Buy often offers store-exclusive laptop models. According to Gap Intelligence’s data from March 2012, 11 out of 12 Asus notebooks at Best Buy were store-exclusive configurations. Out of 14 HP notebooks at Best Buy, 12 were store-exclusive SKUs, and seven in 10 Samsung models at the chain were store-exclusive configurations.

Although showrooming may seem like bad news for retailers, retail chains should not ignore one very important advantage, which is the tactile shopping experience. A high percentage of consumers feel the need to touch and hold a product before making the purchase, which is what initially gets them through the retailer’s door. A majority of purchases are still made the old-fashioned way, by people visiting stores and talking to sales people. Retail stores also offer one more important advantage, which is the ability to buy a product immediately, rather than waiting for it to arrive in the mail.

Despite the changing landscape, retailers should allocate resources toward offering a superb in-store shopping experience, as well as deploy knowledgeable sales representatives to help keep shoppers’ smartphones in their pockets. Consumers do value in-store shopping experience and always appreciate a well-trained sales representative. Those are two reasons why people like to visit Apple stores. Apple stores are exciting to visit, and the company typically employs informed staff. Big-box retailers can benefit a lot by providing an outstanding brick-and-mortar experience and employing an educated sales staff. Retail stores allow consumers to physically test products as well as purchase immediately, which combined with strong in-store experience and knowledgeable associates will help retailers ensure that they are their own showrooms.

About the author: Gurpreet Kaur is an industry analyst for Gap Intelligence, a San Diego-based independent technology research firm with emphasis in helping product manufacturers and retailers understand current retail market trends in order to respond to customer demands as they occur. She can be reached at gkaur@gapintelligence.com.  

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