News

New research attempts to debunk showrooming myths

September 13, 2013

New research from the Columbia Business School and the loyalty firm Aimia offers retailers tips on enticing consumers with mobile devices to make purchases within the store.

The report, Showrooming and the Rise of the Mobile-Assisted Shopper, identifies five distinct segments of mobile-assisted shoppers and uncovers clear opportunities for retailers to engage and retain these tech-savvy customers.

"Retailers don't have to resort to automatic price-matching," said Rick Ferguson, a co-author of the study and the vice president of knowledge development at Aimia. "M-shoppers show a strong willingness to join loyalty programs in exchange for rewards, and this gives retailers the chance to build long-term relationships with them."

The researchers looked at the attitudes, shopping patterns and motivations of 3,000 consumers in the U.S., U.K. and Canada to better understand how mobile devices affect their in-store shopping habits; to identify those shoppers most likely to showroom; and to outline actions retailers can take — such as loyalty programs, price matching, free shipping, and mobile payments — to encourage consumers to open their wallets in-store.

The research results paint a clear picture of today's mobile assisted shoppers — or m-shopper — and debunk commonly held assumptions held by many brick-and-mortar retailers about retail showroomers, the announcement said.

The report offered several key takeaways:

• showrooming isn't just for Millennials — contrary to popular belief, 74 percent of m-shoppers are more than 29 years old;
• mobile devices can actually improve the chances of an in-store purchase: More than 50 percent of m-shoppers are more likely to purchase a product in-store when their mobile device helps them find online reviews, information, or trusted advice;
• price isn't always the most important factor — although "price checking" is the number one action of m-shoppers, convenience, urgency, and immediacy are the top three reasons why M-Shoppers will buy in-store even if they find the same product cheaper online; and
• Loyalty programs are worth more than just their points — 48 percent of m-shoppers say that being a member of a store's loyalty program makes them more likely to purchase products in-store, despite similar or cheaper prices online.

The research also identified five distinct types of mobile-assisted shoppers:

• Exploiters — when they see a product on the shelf and pull out their mobile device, Exploiters are nearly as likely to search for it on the store's own website as on a competitor's site (69 percent vs. 77 percent).
• Savvys — although they represent only 13 percent of mobile-assisted shoppers, Savvys are the ripest target for retailers to try out new offers and experiences in the mobile space. They are simultaneously more digitally-savvy, more willing to sign up for loyalty programs, and more likely to be motivated by a range of retailer offers and rewards;
• Price-sensitives — this type uses their devices in stores periodically, but not as consistently as the others. Often, the right in-store experience will be enough to earn their business. Their mobile devices might be with them, but remain in their pockets and purses;
• Traditionalists — these shoppers are committed to purchasing in-store, making them the least threatening segment of mobile-assisted shoppers for retailers. They are open to interacting with retail stores on their mobile devices, whether by website, store app, or QR code. But, they are currently using their devices mostly to consult on purchases with friends and family; and
• Experience-seekers — the largest of the segments, this group points to the opportunity for retailers to engage customers on their mobile devices in non-financial ways, given opportunities to comment, provide ratings, etc. They demonstrate why retailers still need to invest in providing a unique and compelling in-store experience.

"Our findings debunk many of the common assumptions about the threat of showrooming and who is doing it," said Matthew Quint, a co-author of the study and director of Columbia Business School's Center on Global Brand Leadership. "Many shoppers with smartphones care about more than just the lowest price on every item. In fact, while roughly 25 percent of m-shoppers may require a discount to motivate in-store purchases, a clear majority can be enticed to purchase in-store through information assistance, engagement strategies, and strong loyalty rewards programs."

Read more about consumer behavior.