Woman Using Barcode Reader Through Smart Phone

How showrooming may hurt holiday retail sales

The holiday shopping season is upon us. Retailers everywhere are decking the halls for the busiest time of the year. But if every holiday season has a scrooge, then this year for retailers, it’s showrooming.

Woman Using Barcode Reader Through Smart Phone

With showrooming, a consumer visits a brick-and-mortar store to research a product first-hand. But what happens next stops the sale in its tracks. Empowered by mobile information, the consumer finds a better deal from a competitor and strolls away—not a penny spent at your store.

If you’re a retailer with a brick-and-mortar store, you can bet showrooming will impact your revenue. But just how concerned should you be?

In a January 2012 Pew Internet & American Life Project report, The rise of in-store mobile commerce, by Aaron Smith, store shopping behavior was observed around the 2011 winter holiday season. The findings show that over half of U.S. cell phone owners used their phones while in the store to seek help with purchasing decisions: 25 percent to gather price comparisons; 24 percent to look up online reviews; and 38 percent to call a friend for advice. In addition, 19 percent of those who searched for a better price via phone eventually bought the product online. That’s a sizeable hole in the brick-and-mortar store’s revenue.

Retail segments hit hardest 

While most retailers are not immune to showrooming, there are some segments that can breathe a little easier. Grocery stores and retailers that offer everyday staples run a low risk, as well as retailers that offer goods at a set price, like in the dollar or pharmaceutical segments.

However, if you’re a retailer of electronics, technology, media, toys or big ticket items—pay attention. Showrooming is proving to be a big issue for these segments. These retailers must be vigilant to create a showrooming strategy to retain a competitive edge. The good news? You don’t always have to fight with price.

[via Retail Customer Experience]