“Showrooming”, as it’s termed, has changed the face of shopping forever. Definition: When a consumer visits a physical store to scan a bar code with a mobile device, compare prices, and then orders the product online.
According to IDC Retail Insights Survey, this new shopping behavior has risen a whopping 134% in the past year. About 20%, or 48 million adults in the U.S.,will click their way to better deals while big box stores and other retailers are left holding the shopping bag. Turns out these stores were not well-prepared: A recent study revealed almost half of the retailers surveyed had no strategy in place to counter showrooming, and of the 12% that did, tactics included the desperate measure of blocking bar codes.
So how did this popular consumer trend sneak up on retailers? It’s actually plain to see why when you look at the perfect storm of factors that have been brewing over the past few years.
Black Friday Backlash
Black Friday, the traditional kickoff for holiday shopping season, has gotten a black eye for deployable customer and store behavior that seems to get worse each year. Arguably one of the most shameful manifestations of American consumerism, Black Friday has resulted in violence, even death; and less dangerous but no less offensive, post-Thanksgiving sales are now pushed back to Turkey Day itself. Ironically, studies also show that Black Friday sales don’t always add up to the best value for shoppers, especially when it comes to popular purchases like electronics and toys. Add the fine print on in-store availability and other “gotchas”, and Black Friday is more of a bad habit than a holiday sale nirvana.
Online Shopping Popularity
Showrooming has also quietly risen due to the increase of consumers shopping online during holidays. Cyber Monday (which sounds as passé as “I’m on the net”) was cooked up by Shop.org in 2005, declaring the Monday after Thanksgiving as both the day to shop online and an extension of Black Friday. And it worked. Back then, online shopping wasn’t as common due to privacy and trust concerns, but Cyber Monday has grown in double digits annually (save for the 2008-2009 recession), and now ranks as one of the busiest online shopping days of the year. So even though Black Friday and Cyber Monday have naturally promoted each other year over year, online now wins more sales due to price and ease of purchasing.
“Christmas Creep”
Stretching the season to its outer limit, “Christmas Creep,” or “OctoNovemCember”—the present-day holiday shopping time—created another opening for showrooming. Earlier and earlier in the season, advertisers take out their green and red, yuletide music, and other telltale signs that it’s time to start whipping out the credit card for holiday shopping ’til you drop. Even Cyber Monday has morphed into Cyber Week the past few years. This extension of the holiday shopping season gives consumers the green light to start buying gifts early, often, and for a longer time period.
The “5I Shopper”
According to a recent Pew Internet Report, nearly half of the adult American population owns a smartphone, also giving rise to the very connected consumer, otherwise known as the ” 5I shopper“. With smartphone in hand, they are: instrumented, interconnect, informed, in-place, and immediate. Armed with shopping apps, payment options, and a browser, purchases are now made at the speed of clicks. Add to that marketers have gotten savvier about ensuring customers are reminded of what they bought last year, receive customized savings, and other tactics to make it easier for them to buy, buy, buy whenever and wherever they are.
For all these reasons, many retailers were unprepared for showrooming this holiday season. I predict next year this time there will already be strategies to deal with this trend head-on, especially as losses mount on bigger-ticket items. Blocking the ability to scan bar codes, for instance, is not a long-term plan and will only serve to irritate customers.
Retailers can leverage showrooming if they give shoppers what they want: Great customer service, exclusive offers, and most importantly, the lowest or competitive price. Some stores may adopt the Progressive Insurance approach of proactively offering competitive information. Other tactics might include real-time price matching, offers triggered by scanning bar codes, or redirects to a retailer’s online site with instant discounts. (Walmart already has an app that “flips” from the physical to online store when desired to keep you in the store one way or the other). It will also be critical to ensure that store employees are trained to deal with showroomers and engage with them rather than lose a sale to a smartphone price search.
Of course, if holiday shopping itself gives you a headache altogether, there is the alternative that has become more popular over the years: The art of regifting. In fact 32% of shoppers say it’s OK compared to 25% last year, Not to mention that regifting doesn’t require a smartphone, crowds or spending money. In fact the only place you’ll be “showrooming” is in your unwanted gift closet.