Webrooming: A new reality for retailers

| by Jordan McKee
Webrooming: A new reality for retailers

Retailers' long-standing fear of 'showrooming' – the process whereby shoppers look at products in-store and buy elsewhere, often online, at a lower price – is warranted. 451 Research finds nearly half of smartphone owners have used their devices to compare prices and find reviews while shopping in a retail store, and of those, 42 percent have bought the item from a cheaper online alternative instead. More recently, however, the reverse phenomenon, known as 'webrooming' – by which shoppers research items online and purchase in-store – is taking off.

Webrooming has largely been fueled by shoppers' growing demand for immediacy, and enabled by the spike in retailers offeringsame-day in-store pickup. The Gap and Banana Republic, for instance, increased their number of same-day compatible locations from approximately 600 to 900 between November 2013 and May 2014. In the first year alone, they saw more than a half-million orders placed.

Building on a pilot of about a dozen stores in Washington, D.C. in November 2013, Macy's experienced promising traction early on and extended the service to all 675 full-line stores by June. A multitude of other retailers have either jumped into the same-day fray or expanded their pilots, including Target, Best Buy, Nordstrom, Staples and Kmart.

Walmart serves as a recent success story, reporting strong take-up of same-day pickup over the holiday season, with Cyber Monday 2014 proving to be its biggest day ever for the service. The retail juggernaut saw orders spike 70 percent over 2013, at least in part fueled by this trend. As webrooming grows in popularity, same-day pickup is becoming table stakes for retailers, underscoring the importance of investing in omnichannel technologies.

In response to showrooming, many merchants – including the likes of Best Buy and Staples – have implemented programs that match the price of an identical item shoppers find cheaper elsewhere. These so-called 'price-match guarantees' can be viewed as another factor contributing to the webrooming boom, allowing consumers to comparison shop from the comfort of their own homes and pick up the item of their choosing in a participating store at the lowest possible price. Of those who have used their smartphones to compare prices, we find 29 percent have requested a price match from a retailer. We also find that merchants not offering price-match programs may now be at a severe disadvantage, given 40 percent of those who use smartphones for price comparison have purchased a product from a nearby store with a lower price.

As webrooming increasingly takes hold, merchants must work to eliminate friction across all touch points while unearthing new sources of value. To execute, developing an understanding of how shoppers interact with their brand across the journey rather than pursuing a siloed, channel specific view of each customer is critical. This is where mobile has the strongest story to tell, and the opportunity it presents as the lynchpin that bridges the virtual and physical domains to help retailers attain a more holistic view of their customer interactions cannot be understated.

Topics: Handsets / Devices, POS, Retail, Trends / Statistics

Jordan McKee
Jordan is a Senior Analyst with the 451 Research Mobility team covering mobile payments. His research examines the impact of mobility across the payments value chain with a specific focus on mobile wallets, mPOS and emerging payments technologies. wwwView Jordan McKee's profile on LinkedIn

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