Showrooming Reaching Tipping Point, Changing Retail

Showrooming is the trend towards shoppers visiting stores to see a product, but then buying it online or from some other store.  The reason is they've used their smartphone to compare prices and have found the product cheaper elsewhere - and elsewhere is usually online.

A recent study by GroupM Next found that 44% of consumers use a mobile device when shopping in stores. They also found if the price difference in-store vs. online is more than $5.00, most customers using mobile devices will leave.

Showrooming is a great example of a trend taking years to reach the mainstream.  While the term is relatively new, the idea goes back to 1980s and during the first Internet boom in the 1990s there were quite a few startups focused on providing this type of information.

But the technology wasn't ready.  Today, it is.  Effective showrooming requires smart mobile devices and high speed mobile networks and both technologies are now powerful enough to support the mainstream use of showrooming.  

Based on our work, we think the impact of showrooming is being underestimated by many.  This often happens with technology trends.  One of my favorite trend forecasting quotes comes from Roy Amara, one of the founders of the Institute for the Future. He said:

"We often overestimate the near term impacts of a new technology, and underestimate the long term impacts."  

Over the next few years the number of consumers owning and using smartphones to showroom will increase substantially.  This will cause a fundamental shift in retailing.  

Our advice to small retailers is don't ignore or underestimate this trend.  Start figuring out now how you're going to survive and thrive in the new world of price transparency.  

Comments

[Mark Boyd]

Great point Steve and i wasnt aware of the $5 price variance being so key to a shoppers instore experience. While pricing consistency is obviously a key demand of showrooming shoppers, retail stores still have the power to offer more to visiting customers via a greater level of interaction and opportunity to physically engage with the products they are considering buying, see http://www.perchinteractive.com/interaction-the-antidote-to-showrooming/ for example.