A few studies have emerged recently looking at showrooming behavior – referring loosely to the practice of checking out a product in-store only to to buy it online at a lower price. How widespread is this practice? Which retailers are most at risk? Are retailers winning the battle or losing it? This article takes a look at some of the more interesting highlights from these studies, from Placed, the IAB, JiWire, and ClickIQ.
First off, the study from Placed [download page], which was based on 14,925 US survey respondents, combined with measurement of 1 billion US location data points during January 2013. The “Aisle to Amazon” study looks at which retailers are most at risk of showrooming behavior, by examining showroomers’ propensity to visit the retailer before buying an item on Amazon. Indexing the results to an average of 100, the study found that the top 5 retailers most at-risk of showrooming are:
- Bed Bath & Beyond, with an index score of 127, meaning that that showroomers are 27% more likely to visit the home goods retailer than the average consumer;
- PetSmart (125);
- ToysRUs (121);
- Best Buy (120); and
- Sears (119).
Target, which has been aggressive in its battle against showrooming, showed up as being slightly less at-risk, with an index score of 115.
The study also segregates the responses between male and female showroomers, finding that among males, Best Buy (139), The Home Depot (124), and Lowe’s (123) are most at-risk, while among female, Kohl’s (149), PetSmart (147), and Bed Bath & Beyond (146) are most at-risk.
Meanwhile, among showroomers who had spent more than $100 on Amazon in the prior 3 months, Victoria’s Secret (163) and Bjs Wholsesale Club (163) topped the list of most at-risk retailers, while T.J. Maxx (153) and Costco (149) emerged as most at-risk for showroomers who use Amazon’s Price Check application.
In-Store Researchers More Impulsive
A new study [pdf] from the IAB, conducted by Ipsos MediaCT, looks at mobile’s influence on consumer electronics (CE) purchases, with some intriguing results. Among those, 65% of shoppers who use their mobile device in-store say that it actually makes them more likely to buy the product, while another 30% say it either doesn’t impact their decision. But, where do these in-store mobile users ultimately purchase? While the results show that indeed, 71% purchased the product (as opposed to 59% of CE shoppers overall), 42% ended up buying online, versus 30% who bought in-store, a significant 40% difference.
While that may be discouraging to retailers, separate results from the study bring better news. 32% of respondents who have used their mobile device while shopping said they have made an unplanned purchase in-store, compared to just 7% of respondents who don’t use their device.
In-Store Wi-Fi Affects Shopping Destination Decisions
A separate study from JiWire [download page] reveals that consumer electronics is a good use-case for examining shopping behavior, finding that of the 93.6% of smartphone owners who reported using their mobile device while in-store, 44.4% said they use them most while in electronic retail stores. (Clothing retailers are next, at 25.9%, while big box retailers are further down the list at 14.1%.)
The survey reveals that 8 in 10 mobile consumers are influenced by the availability of in-store Wi-Fi when deciding where to shop, with the 21-24 and 35-44 age groups most influenced. Most respondents use in-store Wi-Fi for price comparisons (63.9% female; 59.1% male), to find product reviews (54.2% female; 59.3% male), and to look for deals, offers, and coupons to use in-store (56.2% female; 41.8% male). That suggests that while the availability of in-store Wi-Fi could encourage showrooming, it could also influence a mobile consumer to make an in-store purchase if the right deal could be obtained.
Are Retailers Winning the Battle?
A recently-released ClickIQ study that follows up from a study published last year on showrooming also finds that among shoppers who researched in-store and then later bought online, the retailers most commonly frequented for in-store research were Best Buy, Target, and Walmart. Putting aside the obvious contrast with the results from Placed, and concentrating instead on trends, the study finds that 20% of consumers who used a smartphone to research a product in-store ended up buying the item from an online-only retailer. That’s down from 29% in last year’s study.
On the surface, that seems like a positive signal for retailers, but as this article from StorefrontBacktalk argues, there may be more behind those figures than initially meets the eye. The crux of the author’s argument is that between last year and this year, more consumers may be researching online first and then choosing to forego a visit to a retailer altogether in favor of an online purchase. Within this context, it’s possible that in-store conversion rates, so to speak, might go up, while actual physical store sales decline. To quote: “the customers who are now going in-store have already either completed their online research… or tried showrooming before and have always preferred the immediacy of buying physically. So by solely examining the in-store actions of shoppers, the analysis is without proper context.” (That assessment can be argued too: it somewhat ignores the use of a retail store as a place merely used to check out a product, but visited with no intention of buying. In the IAB study cited above, 58% visited a store intending to buy the product, but 27% visited just intending to try out the product at the store, but then buy it online.)
But to follow the author’s argument for context, retail sales overall grew by an estimated 4.2% last year, according to the NRF, while comScore pegs retail e-commerce sales growth at 15%. That implies that the author’s concern of “whether Walmart and the like are losing more or fewer sales to Amazon or the like” trends towards the “more” rather than the “fewer.”