For brick-and-mortar retailers, smartphones are often viewed as the enemy. The fear is that consumers will find a better deal on their mobile device, treat the store as a mere “showroom” and then buy what they want online.
Last summer, Best Buy’s then-interim CEO said the company’s “No. 1 priority” was beating the trend and, over the past couple of years, other big retailers have targeted the threat with friendlier, more Apple-like locations and better on-the-ground customer service efforts.
But a study released Thursday from Columbia Business School and loyalty management firm Aimia aims to “bust” what it calls “myths” surrounding showrooming.
The researchers surveyed 3,000 consumers in the U.S, the U.K and Canada and found that while a majority of shoppers said they are guilty of showrooming, mobile phones can actually improve the odds of an in-store purchase.
How rampant is showrooming?
“Our findings contradict many of the common assumptions about the threat of showrooming,” David Rogers, a professor at Columbia Business School and one of the study’s authors, told me. “Many [customers with smartphones] are not showrooming but looking for the right information to be confident in their purchase.”
Unfortunately for retailers, 70 percent of the people surveyed said they had showroomed at least once in the last year. But the study also found that only 6 percent of people using a mobile phone in a store have a premeditated plan to make their purchases online. About half said they look at their phones while shopping to check for price comparisons, but they’re nearly as likely to say that they’re searching for reviews and product information online.
A study released last year by consulting firm Capgemini offered a dim outlook for the traditional retail store: it found that more than half of shoppers globally expected more physical retail locations to become merely showrooms by 2020.
But Rogers and his colleagues take a more positive view. Shoppers are definitely attracted by a lower price online but nearly half of mobile shoppers said that being a member of a store’s loyalty program makes them more likely to purchase in-store despite equal or cheaper online prices. Not surprisingly, shoppers said price-matching, free home delivery, extended warranties and free samples or gifts boosted their odds of keeping their commerce in-store.
Mobile phones can encourage in-store purchases — but incentives help
The study also found that 50 percent of mobile shoppers indicated that additional knowledge – including reviews, advice from friends and product information – makes them more likely to make an in-store buy.
The bottom line for traditional retailers is that they need to make the mobile phone a key part of the shopping experience. And, while many have more to do, some big-box retailers have made moves in that direction. For example, through startup Shopkick, companies like Target, Old Navy and Anthropologie reward customers with redeemable points when they enter their stores. Some retailers are also trying to use the data from mobile phones to learn as much as they can about their in-store customers (which strikes some as a little too creepy), with the hope of being able to serve more targeted ads and deals.
The study offers yet more evidence that the future of retail isn’t necessarily online or offline, but both. While brick-and-mortar retailers take additional steps to engage customers on mobile devices and the web, more online retailers are building up a presence in the physical world. After setting up physical retail stores in New York and Boston, eyewear e-commerce startup Warby Parker opened up its first West Coast location last month. Startups Birchbox, Bauble Bar and Bonobos have also tested the offline experience with pop-ups and other kinds of physical showrooms.
Image by MJTH via Shutterstock.