Showrooming

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Electronic Commerce - ecommerce

    A type of business model, or segment of a larger business model, ...
  2. PayPal

    An electronic commerce (e-commerce) company that facilitates ...
  3. Big Box Retailer

    A retail store that occupies an enormous amount of physical space ...
  4. Brick And Mortar

    A traditional "street-side" business that deals with its customers ...
  5. Click And Mortar

    A type of business model that includes both online and offline ...
  6. Mail Or Telephone Order Merchandise ...

    A regulation that controls businesses that sell products over ...
RELATED FAQS
  1. How important is advertising revenue in the Internet sector?

    Advertising revenue is extremely important to the Internet sector, though reliance on advertising revenue varies among industry ... Read Full Answer >>
  2. What are the most common operating expenses for an online business?

    Online businesses differ in operating needs and expenses but incur many of the same costs that other businesses do. Calculating ... Read Full Answer >>
  3. How has the shift to e-commerce affected the profitability of companies in credit ...

    The shift to e-commerce has positively affected the profitability of companies in the credit services industry. However, ... Read Full Answer >>
  4. How can investors in the Internet sector most directly profit from the growth of ...

    Investors in the Internet sector can most directly profit from the growth of e-commerce by investing in the common stock ... Read Full Answer >>
  5. What are the most unsuccessful tech IPOs of all-time?

    Some of the most unsuccessful tech initial public offerings (IPOs) of all time include theGlobe.com, eToys, Shanda Games ... Read Full Answer >>
  6. How do companies like ClickBank help websites make money?

    Companies such as ClickBank help websites make money online by providing digital marketplaces for entrepreneurs to participate ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.
  2. Investing

    Choosing The Winners In The Click-And-Mortar Game

    E-tailing has changed the way consumers do nearly everything. Do you know how to pick the best retailer?
  3. Markets

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  4. Fundamental Analysis

    Analyzing Retail Stocks

    To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
  5. Options & Futures

    Shopping Online: Convenience, Bargains And A Few Scams

    Shopping from the comfort of your couch has major benefits - and some unpleasant side effects.
  6. Investing

    Doing More With Less: The Sales-Per-Employee Ratio

    If used properly, this ratio can give you insight into a company's productivity and financial health.
  7. Personal Finance

    Which Will Be the Better Bet: eBay or PayPal?

    eBay hasn't spun-off PayPal justyet, but when that day comes (and thereafter), should you choose eBay or PayPal?
  8. Investing

    Wizards Of Odd: A Trip To Tech Land

    I spent a couple of days in Silicon Valley, and here are some key lessons I learned after meeting with a number of tech CEOs and venture capitalist.
  9. Investing News

    Facebook Money Transfer: Transforming E-Commerce

    Facebook's payment service holds huge prospects for Facebook’s business. Here’s how it works, and how it will impact e-commerce and Facebook's business.
  10. Professionals

    What is a SWOT Analysis?

    SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a management tool used to identify strategies for success. It may be used to guide individual thinking, group ...

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center