DEFINITION of 'Showrooming'

The practice of examining merchandise or products in a store and then buying it online for a lower price. "Showrooming" benefits online retailers, since they can offer cheaper prices than brick-and-mortar retailers for identical products because of their lower overhead. They also do not collect sales tax in most cases. The tremendous surge in popularity of smartphones and mobile devices has substantially aided and abetted showrooming, since it gives shoppers much greater flexibility to check online prices and even place product orders online.

BREAKING DOWN 'Showrooming'

Electronic retailers are considered to be among the most vulnerable to showrooming, since the majority of consumers still like to check out the look and feel of electronic products before making a purchase commitment. At the same time, electronic items are among the most popular online purchases because of their relatively small size. In any case, numerous online retailers offer free shipping if the purchase exceeds a certain dollar threshold.

Online retailers are the biggest beneficiaries of showrooming. To combat the growing clout of online retailers, brick-and-mortar retailers such as Walmart and Target are using tactics such as offering in-store pickup for online purchases - thereby avoiding shipping charges - and offering select products exclusively in physical stores.

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