There's a growing threat facing retailers. It's not easily detected and has only recently bubbled to the surface and been given a name—showrooming.
Showrooming is generally described as the process in which a consumer evaluates products in a retail store and, instead of buying a product at the store, purchases it for a lower price online.
Several years ago, this phenomenon was hardly detectable. Showroomers would simply evaluate products, go home, and order their product of choice online. However, because of consumers' growing use of smartphones, tablets, and e-commerce sites, retailers are noticing something new—brazen showroomers are using their mobile devices to shop at a competitor's Web site while still inside the retail store.
It's only natural that this would rub retail executives the wrong way. In this scenario, retailers provide consumers with a well-lit facility, products to evaluate, relevant literature, and (hopefully) helpful sales associates. However, despite all of these investments, they still don't make the sale—essentially reducing the retail store to a showroom for these bargain hunters.
As more people use smartphones, tablets, and e-commerce sites, showrooming will likely intensify. As for now, however, there is some debate over the magnitude of the problem. According to our cover story, "Retailers' Next Biggest Threat," there are conflicting reports on showrooming's pervasiveness. Part of the reason for these discrepancies is due to its definition.
One prominent research firm mentioned in the cover story maintains that showrooming is not as big of a problem as many think. The argument is that it's not showrooming unless the customer intends to showroom prior to entering the store. This naturally narrows the scope of the problem. However, the reality is that it doesn't matter whether or not customers intend to showroom. What matters is the outcome—whether or not they buy from an online competitor.
Just because someone doesn't intend to buy from an online competitor when they walk into a retail store doesn't mean they won't. If I see what I want in a retail store, I have no problem buying it there. However, I don't always know exactly what to buy upon entering a store. Recently, I went to a retail store to purchase a crib mattress for my newborn son. Staring at a wall of options and dissatisfied with the information available to me, I pulled out my smartphone and looked up reviews on Amazon.com. That's when I discovered a dual-sided mattress (one side for infants and the other for toddlers) that received a high rating from a lot of reviewers, so I left and later ordered the product online.
While I had no intention of buying the product online before entering the store, this is exactly what happened. So, whether or not consumers intend to purchase an item online prior to entering the store is irrelevant, because a customer with good intentions can still buy online.
Retailers must address this issue and provide customers with as much relevant information as possible in the store. And if customers still prefer to shop on the Web, then retailers must find creative and valuable ways to bring the store to customers' mobile devices.