Buzzwords can be tough to keep up with, especially in retail where it sometimes can feel like the industry is shifting right beneath your feet. Two much-hyped concepts retailers may have heard chatter about in the last few years are "showrooming" (carrying low or no inventory for purchase in your physical store) and "webrooming."
These concepts are the result of changing consumer shopping habits. Now that many of us shop with a smartphone in hand, more customers are price-checking products on the spot, using online reviews to inform their opinions, and have specific preferences for what kind of products they purchase online and in-store.
While larger retailers may have a larger budget to help them play catch-up with customer demands, small business owners are often under different financial constraints. Never fear—we've collected a few tactics to help direct-to-consumer retailers of almost any size meet those ever-changing customer expectations.
Here, we'll take a look at webrooming and showrooming definitions, explain how they affect your business, and outline specific steps you can take to make these new customer habits work in your favor.
Showrooming and Webrooming Data: What's Driving These Changing Habits?
Showrooming and webrooming aren't new concepts. Some in the retail industry have been fretting over these phenomena since the early 2010s.
But before we do a deep dive into what those two trends are, let's take a look at some of the data. One 2017 study showed about 71% of consumers are still shopping online to find the best price. And according to the Nielsen Global Connected Commerce survey, the majority of consumers conduct research online prior to buying — regardless of whether the purchase was in-store or online.
And while many shoppers are price-checking your products, they're also doing things like looking up additional product information. Below, you can see how these activities are broken down by product categories like electronics, groceries, and travel products:
Shoppers do even more research for certain big-ticket products — which means the showrooming and webrooming phenomena affects some retail niches disproportionately.
"This is particularly true for durable and higher-priced categories such as consumer electronics, mobile products, and furniture/décor, as the majority of consumers in the survey say they conducted research online prior to buying regardless of whether the purchase was in-store or online," says the Nielsen report.
The same study shows that shoppers are more like to buy durable products online (think books, music, electronics, and apparel) rather than consummable products (fresh groceries, medicine, beverages). So, as the report demonstrates, not every retail category is as likely to see a jump in showrooming or webrooming.
Now that we have a better idea of who the modern shopper is and some of their behavior in-store, let's further define showrooming and webrooming.
What Are Showrooming and Webrooming?
Although showrooming and webrooming are on the opposite sides of the shopper behavior spectrum, they're both activities that have evolved from the growing accessibility of technology (i.e. those smartphones we carry with us everywhere). Essentially, they're two sides of the same coin.
According to Techopedia, showrooming can be defined as:
"Showrooming is when a shopper visits a store to check out a product but then purchases the product online... This occurs because, while many people still prefer seeing and touching the merchandise they buy, many items are available at lower prices through online vendors. As such, local stores essentially become showrooms for online shoppers."
Dr. Gary Edwards from Empathica offers a great definition of webrooming:
"Webrooming is the opposite behavior to 'showrooming.' With showrooming, retailers are faced with the challenge of customers coming into the store to browse and test products, only to subsequently go home and actually complete their purchase online (often through a competitor.) Webrooming, on the other hand, is when consumers research products online before going into the store for a final evaluation and purchase."
Showrooming Versus Webrooming
In the past, there has been a lot of gloom and doom talk about how showrooming ate into the profits of retailers and that there was nothing they could do to fend off its impact. However, retailers have fought back and employed several means to offset showrooming's impact, and one result is the rise of webrooming.
Webrooming is a trend that's making waves in retail. According to a Harris poll, 69% of people webroom while 46% of shoppers showroom. Some of the primary reasons for the increase in webrooming (shoppers browsing online and buying in-store) include:
- More retailers switching to multichannel selling and adopting ecommerce
- A greater focus on better in-store customer experiences (like experiential marketing and immersive brand experiences)
- More employee training to build a knowledgeable sales staff
- Click and collect options, AKA in-store pick-ups for online orders
- In-store amenities like WiFi and events
- Smartphone discounts nudging shoppers to buy in-store (proximity marketing)
But what else makes customers want to come in-store to buy your products? Another report from Merchant Warehouse offers some great insights to help us better understand the trend. According to them, here are a few reasons customers prefer to webroom over showrooming:
- 47% don't want to pay for shipping
- 23% didn't want to wait for the product to delivered
- 46% like to go to a store to touch and feel a product before they buy it
- 36% will ask the store to price match a better price they found online
- 37% like the option of being able to return the item to the store if needed
Now, let's look at how retailers can turn these pain points into opportunities for their retail store and bolster their business in the process.
How Retailers Can Make Showrooming and Webrooming Work in Their Favor
With all the changes in consumer shopping behavior, I've compiled a list of five things that you as a retailer can do to take advantage of both showrooming and webrooming trends to build better customer relationships and ultimately increase your bottom line.
1) Go Multichannel
Offering a cohesive customer experience across multiple channels is one key way to encourage shoppers to engage with your brand both online and offline.
So, if you haven't done so already, it's time to seriously consider multichannel retail. Whether you expand to selling through an ecommerce site, social channels, and/or online marketplaces, build a multichannel strategy that works for your unique brand.
2) Engage Customers With Great Service and Incentives
Human interaction is still a vital driver behind why consumers still prefer to purchase products in-store versus online. For example, a TimeTrade study indicated that 85% of shoppers like to shop in-store instead of online. Another 90% of consumers are more likely to buy when helped by a knowledgeable staff member.
Great service can go a long way to lure customers and keep them. A Kissmetrics blog titled The Fastest Way to Lose Customers found that “71% of consumers have ended their relationship with a company due to poor customer service,” and that once these customers are lost, the average cost to replace each consumer is $243.
Retailers can take advantage of this data by increasing interaction between sales staff and customers, ensuring your staff is well-trained on both your products and customer service best practices, and making it easier to return or exchange products (especially in-store).
Here's more data from the Columbia Business School study about what actions retailers can take to increase store purchases:
3) Engage Shopper's Opinions
Shoppers are already on their mobile phone when in-store, so why not take advantage of it? Research shows that 23% already post updates to a social media service while in-store while 19% have checked in with a location-based service like Foursquare.
Why not ask them to like your Facebook page, take a photo with your apparel and use your hashtag on Instagram, or share their purchases on Twitter? You could incentive this through contests, giveaways, coupons, and other creative promotional campaigns.
Also, encourage customers to review both their shopping experience and your products. One recent study shows that 90% of people’s buying decisions are influenced by online reviews — which only underscores the importance of publishing the opinions of your customers.
4) Turn Your Store Into an Actual Showroom
More brands are embracing the showrooming trend in a literal way — they're opening product showrooms rather than traditional stores.
Retailers like Bonobos, Modcloth, and Clearly are opening showrooms to allow customers to touch and feel their products then shipping their purchases right to their doorstep. No more carrying around heavy shopping bags and no worrying about on-site inventory levels.
5) Keep Customers Engaged Even After They Leave Your Store
Your relationship with your customers doesn't need to end once they exit your shop.
Instead of passively waiting for them to cross your threshold again, keep them engaged (and loyal) through a few different tactics, including:
- Use tools like Buy Online for Shopify POS to let customers try products in-store and buy online at a later date
- Set up a loyalty program to reward customers who make multiple purchases with promos, discounts, and freebies
- Build a post-purchase communication plan to use emails, direct mail, social media, or other means to stay in touch with customers so you stay top of mind
- Use email marketing to get more customers into your store
Showrooming and Webrooming: Embracing Evolving Shopping Habits
Consumers will continue to evolve alongside technology, and businesses will have to keep up to stay competitive, relevant, and profitable.
Now that you have a deeper understanding of showrooming and webrooming, you can use your knowledge to your advantage. These trends will continue to evolve, but you can leverage these habits to engage customers across new sales channels.