RETAIL GLOSSARY

Showrooming

The practice of customers visiting a physical store to examine products before purchasing them online, often at a lower price.

What is Showrooming?

Showrooming is a consumer behaviour where shoppers visit physical retail stores to examine products in person but make their actual purchases online, often at a lower price. This practice is facilitated by the widespread use of smartphones to compare prices and read reviews while in the store. Retailers need strategies to combat showrooming, such as offering competitive pricing, providing a superior in-store experience, and implementing technologies like QR codes and mobile apps to enhance the shopping experience.

How Showrooming works

  • In-Store Browsing: Shoppers visit a physical retail store to view and try out products. They may ask questions to sales staff and gain a hands-on understanding of the items they are interested in.

  • Mobile Research: While in the store, customers use their smartphones or mobile devices to compare prices and read reviews of the products they're considering purchasing.

  • Online Purchase: After gathering information and finding a more attractive deal online (often from e-commerce websites or competitors), customers may choose to make their purchase online through their mobile device, sometimes while still inside the physical store.

  • Delivery or Pickup: The purchased product is then delivered to the customer's home or selected for in-store pickup, depending on the retailer's options.
Retailers are challenged by showrooming as it can result in lost sales to online competitors. However, some retailers have responded by implementing strategies to encourage in-store purchases, such as price matching, exclusive in-store deals, and creating exceptional in-store experiences.

Pros of Showrooming

  1. Price Comparison: Showrooming allows consumers to compare prices and find the best deals, potentially saving them money on their purchases.
  2. In-Person Evaluation: Shoppers can physically interact with products, test their quality, and receive assistance from knowledgeable sales staff in a physical store before making a final purchase decision.
  3. Convenience: Consumers have the convenience of researching products in-store and then purchasing online, often benefiting from features like home delivery or a wider product selection.

Cons of Showrooming

  1. Lost In-Store Sales: Showrooming often results in customers examining products in physical stores but making their actual purchases online or elsewhere. This can lead to a significant loss of in-store sales for retailers.
  2. Reduced Profit Margins: Due to intense online competition, customers who showroom are more likely to seek out the lowest prices, which can squeeze profit margins for retailers who are unable to match online prices.
  3. Operational Challenges: Retailers need to invest in strategies to combat showrooming, which might include price matching, providing exceptional in-store experiences, or offering unique products that can't be easily found online. These efforts can be resource-intensive and may not always guarantee success

FAQ

Below you will find answers to common questions
What is showrooming, and why is it a concern for our retail business?
Showrooming is a consumer behaviour where shoppers visit physical stores to view products but ultimately make their purchases online, often finding better deals. It's a concern for our business because it can lead to a decline in in-store sales, impacting our revenue and profitability. To address this, we can implement strategies like price matching, enhancing the in-store shopping experience, and promoting the benefits of purchasing in-store, such as immediate product availability.
How can we effectively combat showrooming and encourage in-store purchases?
To combat showrooming, we can take several measures. First, we should consider implementing a price-matching policy to compete with online prices. Additionally, we can focus on creating an exceptional in-store experience, providing knowledgeable staff, and offering exclusive in-store promotions. Finally, leveraging technology such as QR codes that link to additional product information or reviews can help keep customers engaged and more likely to purchase in-store.
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