Showrooming is a massive problem for brick-and-mortar retailers. Customers visit stores but eventually make their purchases online. Operating a brick-and-mortar point of sale becomes more and more difficult. A scientific research reveals the #1 thing retailers should do to avoid showrooming. And it’s not about price.
Showrooming in context and phygitalisation
Showrooming is a symptom of the tug-of-war between the offline and online worlds. Offline business are slowly dying while online sales are booming. As a consequence online pure players try to extend into the offline world (Amazon bookstores for instance) and offline players offer in-store digital solutions. The intention is the same in both cases : propose the best of the two worlds and ensure customer’s loyalty. Phygitalisation is the new term coined to depict this convergence (see one example here).
What makes the customer satisfied and loyal remains however unknown. Most retail specialists will tell you price is the most important factor to retain customers. Brick-and-mortar stores, despite higher operating costs, are keen on giving customers “lowest prices” guarantees.
Online market research to determine how showrooming really works
Keeping prices low seems indeed like a logical advice. But is it the only factor that explains showrooming ?
A team of academic researchers has surveyed 800 US shoppers and recently published their findings. They analyzed a great variety of factors : those related to a consumer’s chanel perceptions (benefits / costs of showrooming) on the one hand, and contextual factors (consumer-, shopping- and product-related variables) on the other hand.
Their results are astonishing and offer some important conclusions for retail managers.
The #1 thing to do to reduce showrooming
The results indicate that showrooming is explained by 5 factors, 4 of which are NOT in the hands of the retailer.
Showrooming is driven up by :
- perceptions of better online price and quality
- perceptions of larger price dispersion online (hence the perception that better deals are available online)
Showrooming is driven down by :
- the hassle of online search
- consumers being under pressure to find something
- greater available of sales personnel
The #1 thing to do is therefore to increase the number of sales associates in the stores. The authors have also proven that the quality of sales associates was NOT correlated to less showrooming. Thekey message is therefore : hire more junior sales associate to work in your stores, and don’t bother so much about hiring expert or more qualified personnel. It doesn’t matter to reduce showrooming.Tags: consumer behavior, customer loyalty, e-commerce