Showrooming to influence up to $1.7B in holiday retail sales: report
The number of shoppers engaging in showrooming during the 2012 holiday season is expected to increase by 134 percent, with mobile behavior influencing between $700 million to $1.7 billion in retail purchases, according to a new report from IDC Retail Insights.
The report, “Business Strategy: At Hand Versus In Hand – Will Consumers Have the Upper Hand in the 2012 Holiday Showroom Showdown?” found that big-ticket items, especially those that can be easily evaluated with ratings, and reviews will be the most showroomed items this year. Mobile plays a big role in how retailers can address showrooming, including having a mobile-optimized site and smartphone apps.
“The biggest news is the rate of adoption for showrooming – we have 48 million consumers who will be showrooming this year,” said Greg Girard, an analyst at IDC Retail Insights, Framingham, MA.
“Things like a Web site that is optimized for a mobile phone, a smartphone app and smart QR codes – these are things that are going to save the sale for the omnichannel shopper,” he said.
“Customers want to self direct their path to purchase and these omnichannel tools give the shopper more information to help them flow through how they want to shop and come to a purchase decision.”
The omnichannel customer
Showrooming is the practice of using a smartphone in a store to go online and compare prices for an item shoppers are interested in. As smartphone penetration grows, many retailers are concerned showrooming will mean a loss of sales to lower-priced online retailers.
The report reveals some of the ways that retailers can address showrooming, with approximately 70 percent of shoppers planning to showroom this season saying they will be “more likely” to buy from retailers who offer full-featured mobile Web sites, provide omnichannel convenience across stores and Web sites, support smartphone shopping apps and offer price comparisons via QR codes.
Consumer electronics is the category expected to experience the most showrooming, with seven percent to 13 percent of consumer electronics shoppers saying they will use their smartphones at least once in stores this season. Showrooming activities are expected to touch 1.4 percent of consumer electronic sales.
The second most heavily showroomed category will be apparel and footwear, with between four percent and eight percent of shoppers engaging in showrooming activity related to this category and showrooming expected to affect one percent of sales.
“It was pretty well expected that consumer electronics would be most heavily showroomed this year,” Mr. Girard said. The thing that was interesting was that it is apparel and footwear that is going to be the second-most showroomed category this year.
“It is about assuring the customer that their choice is correct,” he said. “When you have assortments that were more relevant and better curated and that understood why the customer wanted to buy, they were less likely to be influenced by showrooming while when you give the customer the paradox of choice, it drives more showrooming.”
Knowledgeable store associates
The results suggest that knowledgeable store associates can minimize the effect of showrooming, with 56 percent to 60 percent of shoppers saying they will be more likely or much more likely to buy what they find in a store when assisted by a knowledgeable store associate.
Additionally, 41 percent of showrooming shoppers say that they will be “more likely” or “much more likely” to rely on their smartphones when they encounter retailers who offer private or exclusive merchandise.
Other key findings include that 64 percent of consumers think what they learn in the store with their smartphones will have at least as much influence on their decision as what they will learn online before coming into the store.
Additionally, IDC’s research suggests that retailers who provide consistent superior customer service, run strong loyalty programs and rely on everyday low prices have a natural barrier against showrooming.
While 48 million U.S. shoppers – or 20 percent of the U.S. population – are expected to rely on smartphones in stores this holiday season, the trend is expected to continue to grow in subsequent years, with showrooming reaching 59 million in 2013, 69 million in 2014 and 78 million in 2015.
“One of the big lessons is that retailers have to engage and embrace this online inside shopper,” Mr. Girard said. “If you invite them to go on WiFi in your store, now you understand where they go.
“If they go on a site that allows paid advertising, make sure your ad gets there at the top,” he said. “This way you can maintain your brand presence even though the customer is going away from you while in the store.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York