Showrooming

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.



comments powered by Disqus
Hot Definitions
  1. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
  2. Oil Reserves

    An estimate of the amount of crude oil located in a particular economic region. Oil reserves must have the potential of being extracted under current technological constraints. For example, if oil pools are located at unattainable depths, they would not be considered part of the nation's reserves.
  3. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
  4. Aggregate Risk

    The exposure of a bank, financial institution, or any type of major investor to foreign exchange contracts - both spot and forward - from a single counterparty or client. Aggregate risk in forex may also be defined as the total exposure of an entity to changes or fluctuations in currency rates.
  5. Organic Growth

    The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic.
  6. Family Limited Partnership - FLP

    A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-owned business partnership that family members own shares of. FLPs are frequently used as an estate tax minimization strategy, as shares in the FLP can be transferred between generations, at lower taxation rates than would be applied to the partnership's holdings.
Trading Center