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Amazon used twice as much as Google for showrooming: report

Amazon is the king when it comes to how consumers comparison shop while in-store, with price as the ultimate factor in driving consumers away from buying at bricks-and-mortar stores, according to a new report from parago.

Another key takeaway from parago’s new report titled “Dynamic Pricing in a Smartphone World” revealed that 58 percent of adult smartphone owners and one-third of all adults in the United States showroom regularly. Although focusing on Google does have its advantages for retailers battling showrooming, the study points to Amazon as more of a threat that retailers should be concerned about.

“Retailers who have been proactive to this point have focused on Google by optimizing for mobile and SEO,” said Rodney Mason, chief marketing officer of parago, Lewisville, TX.

“However, Amazon is used two times more than Google for showrooming comparisons, and Amazon is smart at working around exclusive SKUs and merchandise by serving up comparable items,” he said.

“The research shows if a comparable item is a better value, shoppers will switch. Retailers have to address Amazon’s sophistication.”

Price compare on mobile
Parago surveyed 1,043 smartphone owners in the United States in June 2013 for the report.

In-store showrooming is up 400 percent this year compared to last year, according to the report’s findings.

Ninety-two percent of showroomers picked Amazon to compare prices compared to 84 percent of consumers who picked Google. Interestingly, 46 percent of showroomers are also users of Amazon Prime, which offers perks such as free shipping to encourage online shopping.

Additionally, 50 percent of the males surveyed in the study were Amazon Prime members compared to 42 percent of women.

Income also makes a difference with showroomers. Fifty-nine percent of households with incomes greater than an annual income of $200,000 or greater buy on their mobile devices while in-store.

Seventy-five percent of consumers choose another app to showroom from, and 78 percent were swayed by customer ratings.

Comparison Web sites helped 77 percent of showroomers make up their mind on prices, and 55 percent of consumers were influenced by social media.

Showroomers are also swayed to shop online for a small price change.

A $5 price difference is enough to lure consumers to switch from shopping in-store to shopping online, per parago’s study

Growth of showroomers
Consumers are showrooming across every type of retail category, including appliances, entertainment, apparel and housewares. This shows that consumers expect to find better deals online for both expensive and small items than are available in-store.

Of the 58 percent of consumers that price check items while in-store, 66 percent of these users are researching products weekly, and 26 percent shop monthly.

Additionally, a majority of showroomers will buy an item online that is similar to the one that they see in-store if it is substantially cheaper.

Fifty-six percent of smartphone owners who shop in stores regularly buy competitive products via mobile while they are in-store. Nearly a third of these consumers shop weekly, and 28 percent shop monthly.

However, there are opportunities for bricks-and-mortar retailers to reel showroomers back if the in-store and online values match.

For example, 67 percent of showroomers would buy from a physical store instead of on Amazon if a store were to match Amazon’s price with a rebate.

“Retailers have to have a dynamic pricing strategy that monitors online competitive pricing in real-time and a policy for responding to prices for both exact match items and near matches,” Mr. Mason said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York