The Omni-Channel Customer and the Challenge of Showrooming

Have you ever made a trip to a store specifically to see a product and decided not to buy it? There are many factors that can contribute to this such as the retailer not having the item in stock, the product didn’t meet your expectations, it wasn’t on sale, or you believed that the price was more at the store than the same product online, or you went there with the intention of only viewing the product. This phenomenon of shopping in the store but purchasing online is called “showrooming”. Most predominantly Brick and Mortar Retailers are painfully aware this practice is occurring. Some products categories are more vulnerable to showrooming than others.


Customers are willing to use multiple channels to seek out the best price. This reduces the role of the store, particularly as the point of purchase. The IBM Institute for Business Value’s Retail Study surveyed more than 26,000 shoppers in 14 countries in May 2013 and although 84% of those interviewed claimed to have made their last non-grocery store purchase in-store, only 56% claimed they were sure to return to the store for their next purchase. This potential future impact is high with 1 in 10 shoppers already planning to make their next purchase online.

Product categories that are ripe for showrooming are those with high ticket values such as luxury items, whereas impulse purchase items typically are not at risk. 

Key showrooming risk categories are:

• Luxury
• Sporting Goods
• Consumer Electronics

Your products may be at risk if they are available across multiple retailers and channels, and those homogenous products afford retailers no barriers to entry.

IBM sizes this “showrooming” group at 6% of the overall market; however, luxury items and electronics are shopped at twice the rate of other categories. Market trends show shoppers are becoming more demanding and Omni-channel will allow this trend to gain speed in the future. Particularly if you consider the demographics of who is more likely to shop in a Brick and Mortar storefront, they are on average Baby Boomers 55+. According to IBM those who planned to shift to digital channels were 18-34 and affluent, this is also the profile for a typical showroomer.

Harris Interactive recently published (4/13) a study where 40% of U.S. consumers interviewed claim to have “showroomed.” Showroomers may buy online from your store but odds are they won’t, with 57% of the sales going straight to Amazon. Best Buy has had significant issues with being known as Amazon’s Showroom. Many of the largest retailers are feeling the impact of showrooming with Best Buy, Target and Wal-Mart being at the top of the list.

According to Harris, Six out of ten “Showroomers” with smartphones would prefer to look up product information on their phone rather than ask the salesperson for help. This can be driven by poor customer service or other factors and conducting research on your shopper’s behavior is likely going to be insightful.

There are some retail experiments being conducted right now to combat this buying practice that we can consider. Best Buy recently announced that they would price match 19 online competitor’s prices. The price-matching strategy, combined with more internet-only retailers beginning to collect sales tax, and other aggressive strategies have had a positive impact on Best Buy’s stock; sales appear to have stabilized, although they are still losing money ($409 million) as of the most recent analyst update prior to this White Paper. Additionally, Best Buy looked to partner Samsung to build Samsung stores within the Best Buy stores; and, these stores will have their own highly trained sales staff.

Another experiment has not fared as well. A specialty food store in Adelaide, Australia is charging $5 browsing fee due to the resources it takes a small retailer to staff and train employees only to have them order online later. They are receiving backlash from customers and the media. It appears that the backlash could have been avoided if the store owner was more “up-front” about the “browsing fee” and calling it a consulting fee may be more palatable to customers. However, a fee simply creates one more reason for the customer not to go to your brick and mortar store.

Where do shoppers ultimately buy? According to many sources, 6 out of 10 of those Showroomers appear to go right to Other retailers have changed the way they do business and revised, changed, or invented new business models. Bonobos is a men’s clothing retailer specializing in men’s pants. Their store is online and they have established “guideposts” in a few strategic urban locations to allow their customers to try on clothes and shoppers can make an appointment just like they would with a tailor.

Bonobos online shopping “ninjas” appear when you’re on the website and they offer free shipping and promise painless returns. Shopping typically is not high on a guy’s priority list. Therefore, it seems like they are on-target. But don’t try and buy the pants at the Bonobos guidepost because they are not for sale. The salesperson will complete your online order for you in the store or you can do it yourself from your smartphone. As we recently reported citing a study by the Center for Disease Control (CDC) 51% of people in the United States now use mobile phones only.

The auto manufacturer Tesla Motors has established Tesla Galleries which “does not sell cars, but serves as a place to educate visitors about our groundbreaking electric vehicles.” The gallery practice simply acknowledges the trend of showrooming and provides a place that you can only look. What do Tesla and Bonobos know that other retailers can learn from?

They know at least a few things, including that you need to differentiate and have a unique product and/or service to get shoppers to buy from you. They have also embraced the trends in a way that doesn’t try to disrupt consumers evolving Omni-channel browsing and shopping habits but that plays to them and becomes a way of getting attention. Disruption by means of simply changing what the “store” traditionally represents.

Possible ways of combatting Showrooming:

Price Match. This is good news for retailers willing to try price-matching online retailers. According to Harris, nearly 6-in-10 Showroomers claim they would be more likely to buy in the store if it matched online prices. This begins to take away some of the obstacles to purchasing from your store.

Get Faster. Consider offering online ordering and same-day delivery or pick-up. 86% of respondents said the ability to get their purchase on the same day is a deciding factor in whether they buy online or at a retail location, and 93% of people who said they had tried online order/in-store pick-up were satisfied with the process (Harris).

Customize. Offer something like Tesla that no one else sells, or personalize it. Make it difficult for online retailers to provide “the same” product. Forrester Research published that 35 percent of shoppers are interested in purchasing custom products, particularly in categories where they can stand out from their peers.

Accept Consumer Behavior. Work with the Trend and not against it. It is easier to swim with the current than against it. According to Harris, 57% of shoppers check their smartphone online in the store. Observe and learn where in your store they check their phones and ensure when they check it that your store is the one that comes up; perhaps, with an offer to price match.

Keep Your Word. Have the product you are promoting in stock. We now live in a world of instant gratification. 8 out of 10 customers still want to see the product and once customers are in store an opportunity to deliver on the product is there.

Loyalty Program. Give them what Amazon may not be currently delivering on. Give them the best customer-relevant and driven loyalty program in the business.

Leverage your Brand. Got a great reputation? Clout? Shout it out. Consider customization and partnering with your suppliers for mutual benefit. There may be more risk with customization because once something is customized it can’t be returned to the supplier. However, this may be the new cost of doing business and differentiating because of the way consumers shop is changing.

Appeal to the Wine Collector. You might be asking what? Any wine collector knows the goal is to buy the best wine possible for the lowest price. Shoppers are becoming like wine collectors. It is now a challenge to find the best bargain. TJMaxx, Marshall’s, Home Goods, position their products as getting great stuff for less. Burlington Coat Factory commercials tout getting even more great items for less. The shopper is portrayed as victorious.

Integrate Marketing Channels. Omni-channel – use them all in tandem. Focus on the end-game, the sale. It doesn’t matter if it goes to your store or the online version of your store. There is no difference to consumers anymore. All you care about is that the sale goes to your business.

Look For Best Practices. There are so many opportunities to turn your current negatives into positives and many of them involve doing your homework. Scrape the web for best practices like we did for this white paper and do this often. The World Wide Web is a real-time data machine.

Do Your Research. Co-create. We conduct consumer focus groups at Mindspot Research, both online and in-person groups. Your customers are willing to help you learn how to make their experience better. The best way to be customer-centric is to let your customers drive your decisions.

There’s an App for that. Embrace disruption and understand what Apps might help your customers purchase more from you. We’ve got ways to find out.


Written by Lynnette Leathers CEO of Mindspot Research, a division of Mindspot, Inc.

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