Our Cross-Channel Numbers Show ‘Showrooming’ Could Be Overblown

Consumers are now in control, especially when it comes time to buy. Ubiquitous connectivity allows consumers to easily check prices and buy on the go, which should worry (not terrify) traditional retailers in competitive categories. This “showrooming effect,” which has been encouraged by Amazon, would enable web retailers to snatch some sales from the hands of their brick-and-mortar competition. A majority of sales are still happening offline, so the fear of showrooming — that most people are finding screaming deals online — is largely exaggerated. In fact, the majority of transactions still happen in stores, even when shoppers research online (yes, even when they’ve got their mobile devices in hand in a store).  Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016, which launches today makes it clear just how influential and critical the web channel will be to eBusiness professionals in retail. By 2016 Forrester predicts that more than half of the dollars spent in US retail will be influenced by the Web. Already in 2011, $1.3 billion dollars in the US fall into this category.

It is imperative for eBusiness professionals in retail to adopt cross-channel best practices, including:

  • Pricing more consistently to reduce vulnerability to showrooming. The ability of shoppers to comparison-price shop and demand price matches requires retailers (and manufacturers) to reduce price discrepancies across all channels. With comparable pricing in place, this forecast suggests that many consumers may in fact nonetheless choose to purchase products in stores because of the immediate availability, service levels, or simply because products online do not have significant benefit over those in stores. 
  • Creating a unique merchandising assortment. Diversifying product assortment (e.g., private labels, high-margin categories) or partnering more heavily with distribution partners with strict distribution and pricing is a feasible approach to winning cross-channel battles.
  • Developing cross-device and cross-channel marketing programs. Given the volume of pre-shopping that happens online, retailers in the physical world need to be prepared for shoppers with mobile search, email campaigns, and mobile-optimized content on their sites and apps.

To find out more about our US Cross-Channel Retail Forecast, download the full report here.

Comments

I agree that the showrooming

I agree that the showrooming effect may be exaggerated. Since there are very few if any offline retailers without an e-commerce channel, leveraging cross-channel and cross-device marketing, loyalty, and retention programs will help keep your customers loyal no matter how they mix their shopping and purchasing behavior across the physical and ecommerce worlds. Nice report.

f-commerce

I agree FB is confused on how to evolve on e-commerce with 900M trapped socialites. It involves privacy issue & other channel effects like showrooming. Bottomline is competetive price, instant availability & consumer need. Online gives lower price but invades privacy. Brick & mortar gives instant delievry at excess cost. Any comments Miss.Pulpuru?

Rewarding showrooming

Great posting, Sucharita
We feel that showrooming needs careful handling by vendors, in order to optimise the consumer's relationship with the brand, especially in toys, electronics, home entertainment etc where being able to handle and discuss the product may help in 'completing' the sale, albeit bought elsewhere like online...
We therefore recommend that vendors consider a slightly different business model for specialist retailers
If this idea is of interest, please see more details available at http://www.kamcityblog.com/2012/05/target-to-delist-kindle-fed-up-show.html