Showrooming: A Threat Or An Opportunity?

By Kate Prohorchik, Iflexion

Showrooming is viewed as a major threat to brick-and-mortar businesses. Your previously loyal customers visit your stores, examine your goods, and then go home to buy the item they want online. It can be even worse: they don’t care to leave the store and buy the products online right there via their mobile phone (using your Wi-Fi).

When this phenomenon was first noticed (the term was coined in 2010 by retail analysts), business owners with physical stores saw the beginning of the retail end: online stores cannibalizing brick-and-mortar businesses up to pushing them to non-existence.

Who’s Guilty Of Showrooming?

A comprehensive report on showrooming was first published by Columbia Business School and Aimia in 2013, based on a study of 3,000 consumers in the US, UK, and Canada.

This study explored the myth that showrooming was largely Millennials’ preoccupation—75 percent of the respondents who were using their mobile phones while in-store were 30 or older.

These shoppers (called "m-shoppers" in the study) also made up 21 percent of the total visitors to stores. It was remarkable that many of the m-shoppers were actually webrooming, i.e., using their mobiles for accessing product information and reviews, finding discount coupons, or even consulting friends and family. This often resulted in purchases being made in-store. Showrooming purchases were limited to 12 percent of the m-shopper population.

More recent research from Conversant tells us that 78 percent of shoppers under 35 shop both online and in-store and are 34 percent more likely than older generations to use a mobile phone when in a store.

Why Do Mobile Shoppers Even Need A Store?

According to the same research from Conversant, 58 percent of customers research products online prior to purchasing them in-store, while 46 percent start in-store and purchase online. So, while showrooming is here to stay, brick-and-mortar shopping won’t go anywhere either.

No wonder there will always be uncertainties when buying online, where factors such as fit, brand, and sizing are relevant. In these cases, consumers want to inspect products themselves, which is not possible online whatever device is used. This applies especially to consumables where freshness and quality are key.

Clear evidence of the continuing need for an in-store experience is Amazon's move to brick-and-mortar, like Amazon Go stores.

The trick here is to leverage two channels, online and offline, simultaneously:

• Interact with your customers via mobile while they are in-store using geofencing technologies
• Make interactions seamless by implementing an omni-channel approach
• Provide excellent in-store Wi-Fi to enhance the experience
• Augment in-store experience with affable and knowledgeable shop assistants
• Build an app, which, according to enterprise mobile app development consultants Iflexion, can boost your chances to outshine the competition

Webrooming: The Other Side Of The Coin

The advent of the mobile-first world had surprising benefits for brick-and-mortar businesses. SoLoMo (Social, Local, and Mobile) customers use their mobile phones to find local businesses offering services and products they require.

Here we have the exact opposite of the showrooming shopping behavior. Customers do all their research online, compare features, pricing, and availability of products, make a decision, and then come into a physical store and buy the product they want.

This phenomenon was identified as webrooming in research by ComScore and Neustar on how 3,000 U.S. consumers were using their devices for local searches. Half of these searches were executed via mobile, and 54 percent of all searches resulted in a visit to a local store in close proximity (less than a 20-minute walk) to the respondents. More recent research shows that 83 percent of the U.S. shoppers conducted a ‘near me’ search on their smartphones prior to visiting a brick-and-mortar store during the holiday shopping season.

These studies emphasize how important it is for a retailer to have a website with a decent web search ranking. It can be a proprietary website or coverage in a search engine or other websites, such as store directories. There, customers are looking primarily for store opening hours (77 percent), ratings and reviews (51 percent), and special offers and coupons (42 percent), using online maps for location details. Other information, such as parking availability, is also important.

Digital marketers can take advantage of this trend by developing an app that supplies all the details required by customers. For example, Swiss company Tipiness provides a B2C service via a mobile app for subscribers, sharing information on deals which users can enjoy at stores near their current locations.

How Brands Respond To New Shopping Trends

Some brands use showrooming and webrooming to nurture their customers’ loyalty and prevent them from seeking bargains elsewhere. Though customers’ decision making can be strongly swayed by lower prices, many look for the best experiences.

Samsung, for example, opened a store in New York, which is not a store as we know it. It’s more of an interactive playground where customers get a personal experience with the brand and its products. Samsung also has a number of so-called experience stores where customers not only buy devices but also troubleshoot and get guidance.

In another case, Sephora’s shop assistants noticed that customers, lost in the wide product selection, checked the item’s information and reviews via their phones in-store prior to deciding on a purchase. The brand saw an opportunity to make mobile experience a part of their strategy. They developed the Sephora To Go app that can be used to interact with products in-store and get all the loyalty benefits, such as reward points, promotions, discounts, previews, and just-out product notifications.

Realizing The Benefits Of Showrooming And Webrooming

There will always be shoppers who showroom consistently. Instead of succumbing to depression, retailers need to embrace the fact that customers’ behavior will continue to evolve around technologies.

For this reason, customer experience should be delivered via an omni-channel platform where shoppers can use their desktop at work, a laptop or tablet at home, and a mobile phone on the go to get the information they need. This should be a blend of rich product data, business details, and loyalty rewards. The customer relationship data used to identify what is packaged and delivered to the shopper's device should be as intimate, targeted, and predictive as possible.

No longer is the customer lumped into a "segment"; their unique needs and tastes are recognized in what is delivered on their channel of choice. As Mike Cassidy says, "Webrooming, showrooming? Customers just want a seamless retail experience."

About The Author

Kate Prohorchik is a Technology Observer at Iflexion. She combines business development, marketing and sales backgrounds in the retail IT industry. For the last 8 years, she’s been helping brick-and-mortar as well as digital retailers embrace disruptive technologies and adapt to the new customer-centric reality. Now her expert voice finds its way into her articles on transformative effects of digital innovations in the retail industry.