Showrooming is a new phenomenon arising out of the general availability of mobile internet capable devices. The easiest way to explain it is to give an example. Perhaps you’ve walked into a shop, spotted something you like and want to check if it’s available cheaper elsewhere or if you can arrange free delivery or has a wider range of colours or sizes. You reach for your phone and do a quick search on the internet. The physical shop you are in is functioning as a showroom for online stores.
Many bricks and mortar retailers are concerned they are dropping some sales because of this activity. According to the latest research by the Australian Centre for Retail Studies (ACRS) only 4% of Australian consumers make purchases in this way. Full information will be released in in their annual Retail Insights Seminar later this month.
The early released information from this report seems OK for retailers, at least for now. This is still a significant volume of shoppers. They are doing their research on line either at home or in the store yet still complete the purchase in the store.
The concerns I have with the limited data available to me are:
- the research talks about the number of consumers not the dollar value of the purchases they make. If the showrooming customers are purchasing a disproportionately high dollar value, there may be some cause for concern; and
- this is an evolving phenomenon, there is no guarantee this percentage won’t grow over time as mobile data plans become cheaper and faster, and as more and more consumers discover the benefits.
ACRS correctly point out the need for retail outlets to have a significant online presence to maximise the opportunity to make the sale either in the physical or the virtual store. Reliance on bricks and mortar only store is not a safe strategy.