Sunday, May 6, 2012

“Showrooming” and How Stores are Fighting Back

Showrooming–the practice of shoppers using bricks-and-mortar stores for hands-on research before purchasing elsewhere–has been steadily increasing. The first national attention it received was perhaps this past December, when Amazon offered shoppers $5 off a purchase if they used the Amazon Price Check app in a store. The offer caused a backlash among interest groups, retailers, and shoppers alike. Then in January, Target made headlines by sending a letter to its vendors asking for help in combating the trend. So how common is this practice, and what are retailers doing in response?

While it as received a lot of attention, showrooming is still only common among a minority of shoppers. Studies have shown that about 10% of smartphone owners are using their phones to compare prices. At 50% smartphone penetration, this is only 5% of shoppers. Additionally, shoppers are mainly only doing this for bigger ticket items, with the great majority of trips being unaffected. That being said, showrooming is happening more and more frequently, especially around the holidays. As smartphone adoption continues to increase, in-store research will spread to more categories and Amazon will likely make more aggressive moves.

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