Understanding Showrooming vs. Webrooming

Retail marketing is full of buzz-terms we hear being used at the boardroom table, at conferences, from analysts, and in blogs.  Of particular note are the terms “Showrooming” and “Webrooming”, both of which are causing grief for several retail marketers, to varying degrees.  This guide provides some clarity on these two terms, some valuable data on the audience engaging in these practices, and how more personalized customer engagement is changing the game for leading retailers.

First, some clarity on these two terms. Showrooming occurs when a shopper visits a retailer’s bricks-and-mortar store to review a product and then decides to purchase the product online. They essentially treat the store like a showroom where they can see and feel the product up close, then go out and try to find the best price online.  Webrooming is the opposite scenario where a customer does their research online then goes to a physical store and makes a final evaluation before making a purchase.

In recent years, the majority of “buzz” has been around the doom and gloom scenario retailers were facing with Showrooming.  Some retailers had to completely re-engineer their business model by scaling down the size of their stores and moving more inventory on-line.  An insightful study on mobile device use in the retail space by researchers at Columbia Business School sheds some light onto the phenomenon and who, or should we say what, is driving it.

The report essentially breaks down in-store mobile shoppers into five key buckets:

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*Courtesy of Columbia Business School and AIMA Report: “SHOWROOMING AND THE RISE OF THE MOBILE-ASSISTED SHOPPER”

The study found that 21% of all consumers are in fact “M-Shoppers”, or those using mobile devices while shopping.  While the number of people in this category is growing each year, they are not always using their mobile device in an exploitive manner.  Another revelation was that not all shoppers using a mobile device in-store are millenials.  While they are a driving force and growing, the study found that 74% of M-Shoppers are over 29 years old and not just the Millennial Generation.

The use of a mobile device in-store is less of a gloom and doom scenario than originally thought.  According to the report, “convenience, urgency, and immediacy” were the “top three reasons that M-Shoppers buy in-store even after they find the same product cheaper online”.  Further, 48% of those surveyed were more likely to make a purchase in-store despite finding equal or cheaper prices online – when they were also a loyalty program.

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*Courtesy of Columbia Business School and AIMA Report: “SHOWROOMING AND THE RISE OF THE MOBILE-ASSISTED SHOPPER”

There are also some significant strategic opportunities one could gain from the m-shopper.  First, “60% of M-Shoppers are more likely to buy a product in the store when they find online reviews on their smartphone”.  Next, “55% are willing to sign up for a store loyalty program in order to gain benefits on their smartphone while in the store”.  Finally, “31% are interested in interacting with a store on social networks like Facebook”.

With these insights, it is no surprise that most retail marketers are focused on engaging their customers across multiple channels to combat Showrooming.  The new strategy for this is the delivery of personalized 1:1 experiences to encourage better engagement.  The creation of personalized offers across all channels, tiered loyalty programs designed to deliver personalized shopping experiences, and seamless integration of on-line and in-store product offerings/service are all designed to encourage greater customer engagement.

At the same time, retailers are tackling Webrooming by implementing the tools and content to actually encourage the practice via their own dedicated and branded channels.  According to the study, “M-Shoppers are nearly as likely to use the store’s own website (70%) as another website (75%) to gather product information”.  This means an immense opportunity exists for retailers to use their online channels as a means to personalize each customer’s experience and encourage engagement in-store via mobile web browser or an app.

The ability to use personalized offers to boost engagement is why so many retailers are embracing big data and advanced solutions built around machine learning to gain insights.  Our clients use Coherent Path’s unique math to go a step further and place customers on goal-oriented engagement journeys using personalization.  This has resulted in campaigns designed to move online customers in-store, more effective personalized offers to encourage loyalty program participation, and related strategies to keep customers engaged and on a path to lifetime loyalty.

Needless to say, retail marketers have been busy coping with the new access to information consumers have in-store on their mobile devices.  Thankfully, new technology around big data is helping to make them to be smarter and better at engaging their customers.  As a result, Showrooming is becoming less of a threat and Webrooming is becoming an art-form many retail marketers pride themselves in being able to manipulate for the better.

Are you a retail-marketing leader?  How are you engaging customers to combat Showrooming and refine the Webrooming experience?  Share your thoughts below…

 

Photo Credits: © Tyler Olson

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