What Is Showrooming?
The term showrooming refers to the practice of visiting brick-and-mortar retail stores to research merchandise before purchasing it online for a lower price. The practice allows individuals to look, touch, and test products before they spend their money, especially for higher-priced products. Showrooming became more frequent with the rise of smartphones and mobile devices. Online retailers and consumers both benefit from showrooming because of the competitive prices offered for the same products as traditional retailers.
- Showrooming is the practice of visiting brick-and-mortar retail stores to research merchandise before purchasing it online for a lower price.
- This phenomenon became popular following the rise of e-commerce and mobile devices.
- Some products still require consumers to go into a store to test them out, such as clothing, furniture, and electronics.
- Online retailers benefit and can offer free shipping to their consumers.
- Brick-and-mortar retailers are responding, offering in-store pickup, better in-store experiences, and price matching.
How Showrooming Works
Before the digital era, consumers needed to visit traditional retail stores in order to make purchases. Frugal shoppers looking for a deal had to visit more than one store to get the products they wanted at the best price. But the rise of mobile devices and online shopping changed the way consumers shop.
Consumers may still need to visit retailers for various reasons before they make purchases. For instance, someone who wants to purchase clothing may need to try on a pair of jeans to ensure they buy the right size. Or they may want to test out a sofa at a furniture or department store before committing to such a large purchase.
Going into a store allows customers to test out products like these before making the decision to buy them. It also permits them to comparison shop—even while they're in the store. By going online, shoppers can check out which retailer has the best price. This is referred to as showrooming. Showrooming allows an individual to make purchases at the best price at that exact moment.
Online retailers benefit the most from showrooming because they can offer free shipping over a certain purchase price or to valued consumers. For instance, Amazon (AMZN) offers free shipping to Prime customers. Specialty retailers like electronics stores, tend to be the most vulnerable. Consumers still want to test out this kind of merchandise before they buy. Bookstores also suffer—particularly independent stores whose prices may be higher than online retailers.
Online retailers can offer better prices for the same products because of lower overheads and, in most cases, may not charge consumers sales taxes.
To combat the growing clout of online retailers, brick-and-mortar retailers, such as Walmart (WMT) and Target (TGT), are using a number of different marketing tactics, including in-store pickup for online purchases. This helps them avoid shipping charges while they offer select products exclusively in physical stores. Other tactics include:
- better in-store experiences
- price matching
- buying online but testing out in the store
- allowing in-store returns and exchanges for online purchases
- curbside pickup, common during the COVID-19 pandemic
Smaller stores and boutiques must combat showrooming in more creative ways. Examples of this may include holding special sales, selling in-store merchandise via their website, creating membership clubs, and promoting a shop local culture.
Showrooming vs. Webrooming
Some consumers may like to research their purchases online but still purchase them in-store. This is called webrooming. It is the exact opposite of showrooming and is also referred to as reverse showrooming. With webrooming, a consumer goes online to research products and other merchandise. But rather than buying through an e-retailer, they end up going to a brick-and-mortar store to review and make their final purchase.