Showrooming

80% of Retailers to be Affected by Showrooming

Brick and mortar retailers are painfully aware of the impact of showrooming — the act of consumers using their mobile phones in-store to compare prices with competing retailers — on their bottom line. However, only 10 percent of retailers have strategies in place to combat showrooming, according to a new research study from Edgell Knowledge Network (EKN), in partnership with eBay Local.

EKN’s latest research report, “The Impact of Showrooming on the 2012 Holiday Season,” is based on a retail industry survey fielded to all merchant segments, except grocery, to gain a deeper understanding of the impact of showrooming and retailers’ ability to address it during the 2012 holiday season.

Showrooming is a year-round occurrence; however, holiday season sales are a leading indicator of retail industry performance and consumer sentiment. Focusing on showrooming’s expected impact during the holiday shopping season provides a window into what its overall effect will be in 2013 and beyond.

The research report includes good news for holiday sales overall, as 63 percent of merchant respondents expect 2012 holiday season sales to show an increase compared to the 2011 season. According to the survey’s findings, though, showrooming will take a toll on many retailers’ performances:

• 80 percent of retailers expect to be impacted by showrooming; they expect the average loss of sales to be 5 percent — a significant number, given the low margins in many retail segments.
• Electronics and appliances were the unanimous choice as the retail format most vulnerable to showrooming.
• Price-matching and improved cross-channel integration emerged as the most effective strategies to counter showrooming. However, only 25 percent of respondents reported full integration between their store and online channels, and only 15 percent share their inventory online — indicating a major opportunity for retailers to take measures to lessen showrooming’s impact.

“Showrooming is a phenomenon that’s here to stay. One in four shoppers used their mobile phones to compare prices while in the store during the 2011 holiday season, and those numbers will only grow,” said Gaurav Pant, research director, EKN. “But the good news is that retailers can put strategies in place to help counter the effects of showrooming by engaging showroomers actively, integrating their online and offline channels, and prioritizing their investments to counter showrooming.”

“The Impact of Showrooming on the 2012 Holiday Season” includes specific recommendations for both immediate and long-term tactics and strategies to help retailers combat showrooming, and can serve as a blueprint to help retailers put the most effective programs in place. It is available for download here.