SHOWROOMING - A POSSIBLE RETAIL PROBLEM
The economic state of the world is best reflected in consumer behavior
The recession has been knocking on everyone’s door, including those of retail stores and a shift in the way consumers buy their goods is inevitable.
These days, with the rise of costs in almost every aspect of our lives, saving and being smart with money has become a skill not many can afford to live without.
What is showrooming?
Have you ever looked up a product online and weren’t sure if it was exactly what you were looking for? And so to make sure you like it, you make your way to the closest store that sells that item, try it on, realize you like it, and go home to order it because you might have a coupon that saves you 10%.
If the answer is yes, not only do you know what showrooming is, but you participated in it.
The ability to gather needed information to pick and choose the channel best suitable for purchase is nothing new. Still, it has become more prevalent in recent years due to the widespread use of the internet.
Looking at the data we have for European countries, which we can assume is similar in North America too, 43% of customers take part in showrooming when buying clothes and shoes.
Could it become a bigger issue?
On the one hand, showrooming poses a problem for retail management, as customers rush in and use up the store’s resources (from workforce to rent, heating, electricity, and so on) which quickly turns into expenses too high to cover when there are no purchases being made.
There is also an issue with in-store stock and order planning as the gap between people visiting the retailer and those who walk out having made a purchase grows and makes it harder to predict income and need items.
The only way stores don’t experience losses due to showrooming is when the purchase is made through one of their own channels, for example, their webshop.
But without profit or any other return, there is no way to run a successful business.
Need for saving.
It appears as though getting the desired item at the lowest price point one can find is the biggest motive behind showrooming.
It is also more likely to occur when customers are buying items with a higher price tag and want to make sure they are getting their money’s worth, but that does not exclude non-luxury stores from this phenomenon.
For consumers, examining the quality in store and comparing prices online turns into a scavenger hunt to find who has set the lowest price and to spend the least amount of money while still getting exactly what they want.
The economic climate is changing and behaving like "drunk millionaires" is not the reality for most. Every dollar or even penny saved is of importance, especially in the long run. If they are going to spend, they will do it wisely.
Is there a solution?
One of the possible solutions to help brick-and-mortar businesses is to implement a same-price policy, where other, mostly online, retailers don’t have the right to set lower prices than the ones determined beforehand.
That is most likely never going to happen, especially due to the fact that there are many other factors that affect the price and can’t simply be brushed off (economies of scale, sales, coupons, rebates…).
Other than that, shoppers could see the effect they have on businesses and decide not to do any showrooming but that is just as unrealistic as the first point.
A big part of being a conscious buyer is gathering all the information the market has to offer and making the most responsible and efficient financial decision, and saving a business should never be a responsibility of those who are just trying to save some money.
Thank you so much for taking the time to read this!
I would love to hear your thoughts, especially possible solutions!
I have so many drafts saved and ideas for posts but somehow I always get stuck while trying to write something short that makes sense, but I hope I’ll get out of that slump soon.
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