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Brick-and-Mortar Retailers Find Opportunities in Showroom Shopping

Smartphone shoppers more likely than non-smartphone shoppers to make in-store purchase

NEW YORK, NY (August 15, 2012)— A new eMarketer report finds shoppers armed with smartphones aren’t posing the threat brick-and-mortar retailers might think they are. Instead of trying to combat showrooming, progressive retailers are focused on winning customer loyalty by providing exceptional shopping experiences.

The new report, “Adapting to a Showrooming World: How Retailers Are Earning Customer Loyalty,” analyzes findings from dozens of third-party research providers and interviews with industry executives, answering key questions about how retailers can better respond to showrooming, including:

  • What products are most vulnerable to showrooming?
  • How likely is it that a showrooming consumer will purchase in-store?
  • How does offering free in-store Wi-Fi help retailers reduce showrooming?

Showrooming is a natural outgrowth of consumers’ desire to research products and compare prices. And as the number of smartphone users grows, shoppers increasingly have the ability to take their research activity into the store. According to research from InsightExpress, in 2011 59% of smartphone owners said they used their phone to find a better price while shopping in-store, an increase of 19 percentage points over 2010.

“The showrooming phenomenon exposes two potential vulnerabilities for brick-and-mortar retailers. First, brick-and-mortar retailers likely have higher fixed costs than their web-only rivals, making it hard to compete on price,” said eMarketer. “ Second, they are dealing with consumers who are better informed, more demanding, and more aware of alternative sources of goods and services.”

Despite the threat many traditional retailers believe showrooming poses, consumers aren’t necessarily doing in-store smartphone research in order to make a purchase online. In-store shoppers who make a purchase after using a mobile phone to look up product prices usually buy at that store rather than online or from another store, according to a Pew Research survey conducted in December 2011.

Additionally, smartphone shopping dramatically improves in-store sales. A Deloitte study found that shoppers who use a smartphone in-store are 14% more likely to convert in-store than those who don’t, even when those smartphone shoppers use a mobile app or site not belonging to the retailer.

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Posted on August 15, 2012.