The Green Sheet Online Edition
January 27, 2014 • Issue 14:01:02
Will showrooming spark retail innovation?
With the 2013 holiday season in the rearview mirror, it is now the task of economic analysts to crunch shopping data and pinpoint potential new consumer trends. One such trend is showrooming and the effect it had on brick-and-mortar retail sales over the holidays.
Showrooming is a growing phenomenon that involves consumers who peruse physical stores and simultaneously use smartphones to browse virtual stores for the same merchandise, only at cheaper prices. When consumers use shopping excursions as a way to purchase better deals online, it is seen as a threat to the already slim margins of brick-and-mortar retailers.
Djamel Agaoua, Chairman of mobile advertising firm MobPartner, said that mobile devices "will radically change both online and physical retail over the next few years."
The latest data
According to mid-December 2013 research from Paris-based MobPartner, 75 percent of U.S. consumers were intent on using mobile devices to plan holiday shopping, with showrooming being among the primary activities. The behavior is apparently more popular with men than women, 61 percent to 51 percent respectively, according to the study.
The survey of 500 U.S. consumers concluded that showrooming has become an entrenched behavior; 55 percent of respondents admitted having showroomed at least once; only 8 percent stated they do not engage in the activity.
Internet analytics firm comScore Inc. revealed more conservative showrooming metrics in its July 2013 survey, State of the U.S. Online Retail Economy in Q3 2013. The report said only 34 percent of U.S. consumers are showroomers, and of that percentage, the majority showroom only occasionally.
However, the survey also found that showrooming via smartphones had "increased significantly" during the second quarter of 2013, up from 41 percent to 49 percent.
A proactive approach
Perhaps the most surprising finding from the comScore research was that 44 percent of showroomers never planned to buy from the physical stores where they engaged in showrooming.
It is that sort of alarming statistic that spurred big-box discount retailer Target Brands Inc. to issue a letter to its merchandise suppliers in January 2012 suggesting they create special products that would compare favorably to competitors' online products, both in quality and pricing. Target also floated the idea of a subscription service that would motivate consumers to shop at Target for regularly purchased goods.
More recently, electronics retailer Best Buy Co. Inc. launched an advertising campaign in October 2013 that touted Best Buy as "Your Ultimate Holiday Showroom." Best Buy enlisted celebrities, including Will Arnett and LL Cool J, to highlight the Best Buy experience, both online and in-store, with its "low price guarantee" and in-store pick-up of products ordered online.
According to a Dec. 26, 2013, Ad Age article, Boston-based social media analytics firm Crimson Hexagon analyzed 16,000 Twitter and Facebook posts; it concluded that while Best Buy's ad campaign resonated with consumers, the ads did not convert consumers into Best Buy shoppers.
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