Showroomers like pets and pillows
March 7, 2013 09:44 AM
A shopper might pick out Spot’s collar at a PetSmart store, but there’s a good chance she will buy it on Amazon.com, new research suggests.
The practice is called showrooming, and it is a savvy and increasingly common shopping tactic. Enter a store to see a product in person, ask a salesperson questions, test out the features and functions, and then cruise major online shopping sites like Amazon to see if they offer the same product for a lower price than the store.
Showrooming, some research suggests, is hurting retail chains that pay for space and employees to house and greet shoppers only to lose sales to online competitors with lower overhead that can offer the same product at a cheaper price. In fact, 43% of U.S. adults have participated in showrooming, according to a survey of 2,249 consumers conducted by the Harris Poll from Nov. 27-29.
A new study from Placed, a vendor that aims to measure consumer behavior in stores and other physical locations, suggests that the retailers most frequented by showroomers are Bed Bath & Beyond, PetSmart and Toys ‘R’ Us Inc. Consumers who have found an item they want at a store and then purchased it on Amazon are 27% more likely to visit Bed Bath & Beyond than the average U.S. consumer, 25% more likely to visit PetSmart and 21% more likely to trek to Toy ‘R’ Us. Those stores all beat out Best Buy Co. Inc., which was 20% more likely to be visited by a showroomer than by the average U.S. consumer, Sears Holdings Corp. (19% more likely) and Target Corp. (15% more likely).
“All the attention to date has been on Target and Best Buy as the early victims of showrooming, but significantly more retailers are at risk,” says David Shim, founder and CEO of Placed. “Retailers need to know that it’s not a question of if or when showrooming will impact their business, as an aisle to Amazon is already in their store.”
Both Best Buy and Target recently announced they would match online prices in an effort to combat showrooming. Best Buy stores will match prices set by all local retailers as well as 19 major online retail competitors and BestBuy.com. Target, meanwhile, recently said it will match prices on qualifying items sold at Amazon.com, BestBuy.com, Walmart.com and ToysRUs.com—including BabiesRUs.com—as well as items on Target.com.
The Placed study dug further to identify users of Amazon’s Price Check app, which allows shoppers to compare prices and purchase on Amazon while in a bricks-and-mortar store by entering a search term or scanning a bar code with a mobile device.
Amazon Price Check app users were 53% more likely to visit T.J. Maxx, a discount apparel retailer, than the average U.S. consumer, suggesting the price-sensitive nature of Price Check users, Placed says. Price Check app users were 49% more likely than the average shopper to visit Costco, 33% more likely to visit Office Depot Inc. (which recently announced its merger with OfficeMax) and 31% more likely to visit AT&T Wireless locations. That was followed by Best Buy (28% more likely), RadioShack Corp. (22%), Target (21%) and GameStop (19%).
However, Price Check users don’t fancy Kmart, the research suggests. They were nearly 25% less likely to visit Kmart locations than the average U.S. consumer.
The research is based on a survey of 14,925 U.S. smartphone owners who have an app from Placed that uses geolocation to detect store visits. Placed then weighted the survey data to statistically represent the average U.S. consumer.
Amazon is No. 1 in the Internet Retailer Mobile 400; Toys ‘R’ Us is No. 50; Best Buy, 25; Sears, 29; Target, 34; Wal-Mart, 6; Costco, 22; Office Depot, 65; Radio Shack, 115; and GameStop, 90.