CE Week New York – While brick-and-mortar retailers do lose some sales to showrooming, the phenomenon has been largely exaggerated, a CE Week retail panel concluded.
The super session, dubbed “Retailing Business Models,” was held during the CEA Research Summit here yesterday, marking the start of CE Week, and was moderated by TWICE editor-in-chief Steve Smith.
Panelists downplayed the threat of showrooming by noting that most consumers still prefer in-person engagement, and that any purchases made in-store from a mobile device are often transacted at the retailer’s own website.
“Showrooming is overblown and the numbers show it,” argued Stephen Baker, industry analysis VP for The NPD Group. “Is two in 10 [defections] enough to break the retail business model? No.”
Baker said retailers are adept at building their own websites which reclaim “a huge percentage of sales.” He also believes the concept of showrooming was promulgated by Internet interests that “want it to be happening, so they tell you about it.”
Panelist Randy Schrock, strategic services senior VP for BDS Marketing, observed that “People love interacting with sales associates,” and that half of in-store shoppers tend to follow their recommendations. His comments echoed those of fellow panelist Chris Ely, CEA’s industry analysis senior manager, who in a preceding super session noted that “Consumers like human interaction.”
On the panel Ely added that “People still want to see, touch and feel the product,” which is a traffic draw that’s unique to physical stores.
But Schrock cautioned that while 85 percent of shoppers buy from brick-and-mortar stores, between 10 percent and 25 percent do in fact showroom. “That’s not a death knell,” he noted, but could become problematic if retailers allow further share erosion.
All agreed that physical retailers need a knowledgeable, adequately-staffed sales floor to satisfy what Ely described as “a yearning for in-person retail expertise.” But merchants must balance that with cost, profitability and sales floor flexibility, the panelists said.