Showrooming Showboating: If It’s In Context, It Wouldn’t Sound GoodWritten by Evan Schuman
A showrooming study published on February 22 tries to make the case that Best Buy (NYSE:BBY), Target (NYSE:TGT) and Walmart (NYSE:WMT)are winning their battles against showrooming. But the lack of context makes a better case that showrooming is almost impossible to measure and might not even meaningfully exist.
The study, done by ClickIQ, reported that all three chains saw fewer in-store shoppers eventually purchase online, when comparing 2013 data with 2012 data. What the study didn’t explore was whether more shoppers were simply doing their online research first and then choosing to buy from an E-tailer. To be blunt, the retail concern is whether Walmart and the like are losing more or fewer sales to Amazon (NASDAQ:AMZN) and the like, and this study simply didn’t try and address that.
Indeed, answering that question is the more likely next step for shoppers if these chains are losing the battle against so-called showrooming. After shoppers come into, let’s say, Target repeatedly and then find that E-tailers repeatedly offer the same for less, those shoppers would simply stop bothering to even drive to Target and would go straight online. This study would interpret that outcome as a win for the physical stores—because the percentage of people who go into the store and then buy from the store would go up—when it’s actually a clean loss.
Put positively, the customers who are now going in-store have already either completed their online research—at home, at the office or, perhaps, while sitting on a park bench—or tried showrooming before and have always preferred the immediacy of buying physically. So by solely examining the in-store actions of shoppers, the analysis is without proper context.
The concept of showrooming is generally used to refer to in-store shoppers who examine products and then buy them for less online. (The concept of showrooming doesn’t have to be limited to E-Commerce, as shoppers who play with products at a major chain store and then purchase them for less at a local discount brick-and-mortar are equally guilty. But it ruins the marketing efforts behind showrooming, so we’ll surrender to their more limited definition.)
This report was based on online surveys. The results from 2012 were from 3,780 shoppers (surveyed from March 2 through March 8, 2012), and this year’s stats used answers from 5,543 shoppers (surveyed from January 30 through February 7, 2013). But the numbers for this comparison report were actually a lot smaller (406 last year and 1,000 this year), because of the two needed restrictions (“must have shopped in a retail store within the past three months and also own a mobile device” and “further qualified by stating that they used the mobile device while at a brick & mortar store to research a product and have since purchased the researched product.”)
This raises another issue with how much weight to give these results. The report wasn’t saying these shoppers made these purchases after doing this mobile research. It was merely saying this was what they said in an online survey. Did these shoppers correctly recall these transactions from as long as three months earlier? Were they being truthful? Were they taking the survey seriously and considering all of the options?
The report also seemed to narrow E-tailers to just Amazon, which throws in another key variable, with other E-tailers possibly getting more of those brick-and-mortar dollars.
Here are some specs from the report. Its Target data: “Of those that did their research at Target in 2012, 29 percent purchased at the Target store, 8 percent purchased at Target.com and 21 percent purchased from Amazon. 2013 data shows that Target did the best job retaining customers with a full 43 percent of in-store researchers making their purchase from the Target store, a significant increase over the 29 percent from the previous year. Where Target fell short was dropping from 8 percent who purchased at Target.com in 2012 to less than 1 percent in 2013. Even with that drop, Target gained back from its 21 percent loss to Amazon last year with a defection of only 13 percent this year.”