One of the hottest trends in the retail industry today is “showrooming”, or browsing in-store products only to purchase them online later, usually at a lower price point.
So how has this new consumer trend changed the retail industry? Here are 6 ways…
1) Online retailers are creating apps to make showrooming easier – Outside of “barcode scanner” apps, one leading online retailer in particular launched a price-checking app that offered consumers 5% off any item they scanned if the item was found on their site. This tactic is likely aimed at getting more consumers to use scanning apps while in physical stores.
2) Electronics and appliances are the most showroomed product categories – This is primarily due to the fact that people making these purchases are more “tech-savvy” than the general population, as 61% of consumers who shop for these products use their smartphones on a regular basis. These items are also generally higher-priced items, which can lead to more consumer research both in-store and at home. In an attempt to combat showrooming in these product categories, some electronics retailers have also created specific model numbers of the same product for specific stores to make the products “unique” and more difficult to track.
3) Physical stores fight back with custom bar codes and rewards – A major U.S. retailer has replaced traditional bar codes with their own “retailer-specific bar codes” and added their own QR codes on products in an effort to slow the growth of showrooming in their stores. Another major U.S. retailer has started a loyalty program which rewards customers for visiting their stores with unique discounts.
4) Inventory models have changed, partially because of showrooming – In the past if a store did not have a shirt in the right size you had to go to another store or try to find the product online when you went home. Now, more stores are using omni-channel solutions to unite inventory between stores and their website to make sales on the spot instead of sending customers away empty handed. Some retailers, particularly in apparel and fashion, are also limiting the availability of their products to some reseller sites to obtain more control of their product distribution, pricing, and brand image.
5) Online price matching has become more prevalent – Many major retailers in the United States have started price matching their main online competitors in the past year. One of the largest U.S. retailers began online price matching for the first time during the 2012 holiday season and decided to continue their price-matching efforts permanently. The concept of price matching has become confusing to some consumers, especially when attempting to price match reseller sites when certain stores will only price match specific resellers.
6) Mobile isn’t all bad for brick-and-mortar stores – Although some solutions are complex, geo-location services are starting to be leveraged by stores as they look towards “big data” to further understand their customers. For example, a major U.S. office supply retailer now offers discounts to their customer based on their “check-in” history at specific store locations. The unification of geo-location and how it fits with current consumer insights is an area of marketing which will likely change in the coming years.
In short, showrooming is a tactic which has initiated a change in the way the retail industry is operating and will continue to operate in the future. In the past (before over half of U.S. adults owned a smartphone or tablet), online and offline sales were fragmented and disconnected. Consumers took a chance with their time and money when they left brick-and-mortar stores in an attempt to find products online for a lower price. With the new dominance of smartphones, there is no longer a need to take this chance and it is possible showrooming will only continue to become more popular as smartphone ownership rates continue to increase.