KEY POINTS
Showrooming was once seen as an existential threat to bricks-and-mortar retailers, but it turns out the reverse dynamic is more popular. Reverse showrooming, where people browse online but buy in stores, is actually more common than showrooming. In the U.S., 69% of people have reverse showroomed, while 46% have showroomed, according to a Harris poll.
Another myth around showrooming is that young people love to do it. In fact, the data shows that millennials prefer to reverse showroom. For electronics, shoes, sports equipment, and cosmetics, more millennials say they prefer to reverse showroom, rather than research in store and then buy online.
Traditional retailers can do more to ride the "reverse showrooming" trend. Offline retailers have realized they have a lot to offer, as long as they can integrate offline and digital, and beat e-commerce competitors on convenience: knowledgeable sales staff, in-store pickup of online orders, hands-on service, in-store Wi-Fi, and smartphone discounts that nudge showroomers to buy in-store.
Amazon remains the No. 1 place where showroomers end up making their purchases, but it's an even more popular destination for reverse showroomers who ultimately buy elsewhere. Social media has also become a major referral source for bricks-and-mortar chains, not just e-commerce sites.
New initiatives for the connected in-store experience keep popping up, which are meant to help dissolve the line and level the playing field between e-commerce and offline retail: tablets and mobile phones used as register systems, robotic arms that deliver clothing into dressing rooms, and beacon hardware, which powers in-store maps and automatic hands-free payments.
The key rationale behind all these changes: retailers are beginning to think of themselves less as purveyors of goods, and more as all-around consumer resources.
Introduction
In the past few years, as online shopping exploded and smartphones became the norm, the showrooming phenomenon seemed poised to gut the revenue of offline retailers.
Consumers headed into their local stores, got an up close look at products, then did a quick search or scanned barcodes to see where the items could be purchased for less money — most often on Amazon.
But now retailers have discovered "reverse showrooming," or "webrooming," which is when consumers go online to research a product or figure out what they might want to buy, but then head to a bricks-and-mortar store to complete their shopping. They do this on Amazon, on social media sites, maybe even on a retail chain's own website. Then, when they’re actually ready to purchase, they head to a local store.
Data shows that people actually reverse showroom more often than they engage in “traditional” showrooming. Reverse showrooming is nothing new. Since the early days of online shopping, more people have researched their shopping online than have actually bought there.
What has changed is that retailers have begun to identify the reverse showrooming trend and the opportunity it offers to them, and they are now working to actively capture those sales.
There has always been a mismatch between e-commerce and traditional retail in terms of price and costs. Amazon and its e-commerce peers thrive by price-cutting and subsisting on razor-thin margins, while traditional retailers have had less ability to cut prices because they have to support the cost of maintaining physical stores, sales staff, and expensive leases.
But the field is becoming more evenly matched. Amazon recently said they would up the price of Prime memberships, meaning consumers will have to pay more to get their purchases delivered in two days. And more states are beginning to collect taxes on online retailers. As consumers are forced to pay more to get their online purchases — and pay even more to get them fast — the offline option will become more compelling.
In this report, we examine the numbers behind showrooming and reverse showrooming, what's driving each trend, and what the different showrooming behaviors look like. We also look at what in-store advantages retailers have, and what they are doing both to capture in-store sales from reverse showroomers and to drive up purchases across channels.
Editor's Note: Since "reverse showrooming" and "webrooming" refer to the same behavior, for the purposes of this report, when citing any studies on the topic in charts or text, we will call the phenomenon "reverse showrooming."
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Reverse Showrooming Behavior Is More Common Than Showrooming
Studies consistently show that in general "reverse showrooming" — supposedly a brand new behavior — is actually more common than showrooming. That's true both in terms of how many people do it, and how routinely they engage in the behavior.
Here’s a look at the numbers:
Reverse showrooming is much more likely to be a regular behavior than traditional showrooming. While only about a quarter of people regularly engage in showrooming, 41% regularly reverse showroom, according to a Vision Critical study of social media users in the U.K. and North America.
In the U.S. alone, the likelihood of consumers showrooming and reverse showrooming is even greater.
During the 2013 holidays, Accenture found that 63% of Americans reported showrooming, compared to 65% who engaged in reverse showrooming. The holidays also likely drove up online research behavior overall, as people race to save money wherever they can on their gift-giving.
A Harris Poll found that the number of Americans who showroomed rose to 46% in November 2013, up slightly from 43% in November 2012.
But the advantage still went to reverse showrooming. Nearly seven out of 10 respondents had reverse showroomed that month, according to the poll (see chart, below).
Showrooming is also not necessarily a young person’s game, as many have assumed.
Only 20% of respondents between 18 and 35 years old said they preferred to make clothing purchases online, according to a study from the Urban Land Institute.
The remainder cited various offline retail locations as their preferred way to shop for clothes — 12% specifically cited reverse showrooming as their preferred way to shop, saying they ideally do research online first and then buy in person.
For electronics, the skew to reverse showrooming was especially strong among millennials, with 50% saying they research online and then buy in store.
In fact, for electronics, shoes, sports equipment, and cosmetics, more millennials said they preferred to reverse showroom, rather than research in store and then buy online.
The takeaway from these numbers is that reverse showrooming is without a doubt more common than showrooming. But showrooming certainly isn’t going away.
With this in mind, retailers might use two methods to deflate the threat from showrooming: ride the reverse showrooming trend, and simultaneously, revamp their in-store thinking.
What’s Driving People To Showroom And Reverse Showroom?
Those who showroom or reverse showroom share a characteristic: they might be described as heavy researchers; there’s a surprising amount of cross-over between the two activities.
The Harris Poll found that nearly nine in 10 of those who had showroomed had also reverse showroomed. Of those who had reverse showroomed, six in 10 had showroomed.
It's useful to think of how much effort it takes to engage in showrooming, in order to understand how these shoppers might be persuaded to buy an item in-store.
Shopping online is a somewhat passive, recreational activity. In contrast, showrooming with a mobile phone in hand — actively checking prices online while browsing in a store — is an intensive and sometimes cumbersome undertaking.
Given weak cell signals and the likely absence of Wi-Fi in-store, not to mention the laborious process of locating specific items and then looking them up, it takes true dedication to showroom systematically.
That means showroomers are the heaviest researchers of all, and they are actively looking for the most advantageous terms in order to complete a desired purchase. This also means that they are very likely to eventually convert — whether it's at an offline retailer, or at a "pure-play" e-commerce competitor (by pure-play, we mean that they're online-only like Amazon or Overstock, not a traditional retailer that also has an e-commerce operation).
The data confirms that research corresponds with purchasing. Nearly half of consumers felt better about making a purchase after doing research, while only 15% were dissuaded from going through with buying, according to a September 2012 Vibes study. So a well-researched shopper, whether showrooming or "reverse showrooming," presents an opportunity to all retailers.
But this shopper is a challenging prospect — a hard-driving consumer. This person may be using their phones to scan bar codes in search of even a small discount, or check one last time to see if maybe Amazon has dropped their price on the item.
So, what drives a showroomer to buy in-store rather than online?
According to Accenture’s survey, avoiding shipping costs is the top reason people research holiday gifts online but then buy at a local retailer, i.e. "reverse showroom."
The second reason, which ranked very close to shipping costs, was simply wanting to touch and feel the item itself.
Finally, inventory is important. Consumers like to check online whether an item is in stock and then buy it in the store. Any gaps in inventory can result in missed opportunities for bricks-and-mortar sales.
For online buyers, the motivating reasons to complete their purchases on the Internet were free shipping, followed by discounts, and avoiding crowds.
Also, notably, an easy-to-use website actually ranked above free returns as a more important motivation to buy online, further indication that for consumers the bottom line isn’t always about dollars and cents.
What Showrooming And Reverse Showrooming Behavior Looks Like
No surprise: Amazon remains synonymous with showrooming.
Nearly six out of 10 showroomers in the Harris poll said they most frequently ended up buying from Amazon.
Wal-Mart came in a distant second, as the online store where the second-greatest number of showroomers purchased. Only 6% reported regularly purchasing from Wal-Mart's site after looking around at offline retailers.
Clearly, Amazon still has a corner on the showroomer market.
But Amazon is also the top stop for reverse showroomers who eventually buy elsewhere.
Nearly half of reverse showroomers said they visited Amazon first to do their online research, before eventually buying offline elsewhere.
Amazon, in a sense, is the online product library. It’s where people go to do their online shopping research, no matter where they plan to eventually buy.
Perhaps Amazon is less a foe to traditional retailers than it is thought to be. Bricks-and-mortar retailers should look to Amazon as a marketing opportunity, a place to promote their stores and their offers, perhaps by buying Amazon product ads. They should also ensure that their inventory matches what Amazon indexes, so that when customers call to see if they can buy something in-store after searching on Amazon, it's there.
Social media is another way people are doing their online retail research, whether they buy online or off.
Nearly half of respondents to a Deloitte study early in 2013 said that they would use social media to help with their holiday shopping. Of those, nearly half said they would do so to research gift ideas, while another 44% would look to social media sites for discounts, and 40% would be reading reviews and recommendations.
As for what social sites are the most influential, Facebook still leads, both online and off. Nearly four out 10 Facebook users said they had bought a product after sharing or favoriting it on the site, a Vision Critical study found. Pinterest was next, with 29% having done the same, followed by Twitter at 22%. In all three cases, the percentage of people who bought online and off was about equal.
So it's not the case that social media only drives online purchases. 
Looking more closely at in-store research activity, it's clear that in-store showroomers are visiting competing retailers to see if they can find an item cheaper online.
The top mobile phone behavior in-store was checking Amazon or another online retailer, according to a November 2013 Marketing Land study, with 31% of respondents reporting that they do this. Another 18% said they specifically looked for other stores that have a desired product in stock.
But there were still plenty who were doing other forms of product research on their phones.
This is where retailers have a special opportunity to use an "omnichannel" approach, to keep consumers on their own sites or buying in-store. A savvy multichannel retailer will build out in-store digital marketing programs, great apps and mobile sites, and a tight integration of their e-commerce efforts with in-store conveniences (e.g., online ordering with in-store pickup).
Three out of 10 shoppers used their smartphone in-store to look for offers or coupons. This is something which a retailer could make readily available through a number of different mobile means, including QR codes or via push notifications.
And 27% looked for product reviews, something which a retailer could offer via a mobile site or app.
Another 15% scanned a product's barcode in store.
A Google study found that the most common way consumers conduct in-store smartphone research is via a search engine, followed by visiting a store's website. And mobile sites were widely preferred over apps.
For both offline and online retailers, the shopping “experience” is critical, and it's just as much about convenience as it is about price. More than half of Google respondents said they used mobile for shopping to "save time," ahead of "saving money."
Mobile shoppers also consistently spend more money than those who don't shop via smartphone.
The most important way offline retailers are competing with online retailers then is by turning themselves into flexible hybrid stores, making themselves readily available to consumers across mobile and online, so that there is as little incentive as possible to look elsewhere to make a purchase.
The data makes clear that showrooming consumers will comparison shop while in store. But more often than not, they will also be looking for a reason to head to the checkout line right then and there. Retailers need to do more to nudge them in that direction.
The data shows that many retailers are finding success doing just that.
A fair number of showroomers do leave stores to purchase from a competitor after showrooming — 25%, according to the Vibes study.
But even more purchased from the store’s own site, at 29%.
And this does not include those who go on to make a purchase in the store itself, likely the largest percentage of all.
But how, specifically, are retailers managing to ride the reverse showrooming tide?
Retailers Invest In 'Omnichannel' Approaches
Retailers with online and offline stores no longer care which channel their customers use to complete their transactions, be it mobile, desktop, or in-store, just as long as those customers don’t turn to a competitor, like Amazon or Wal-Mart.
For multichannel retailers to compete with Amazon and other online players, their online and mobile sites must work seamlessly, and quickly provide all of the information the consumer is after.
Here’s how some of the other big retailers are harnessing their mobile, online, and in-store integration:
Free Wi-Fi: During the 2012 holidays, a number of retailers began installing free Wi-Fi in their stores. This would seem like exactly the wrong response to showrooming — why give consumers an even easier means of looking up product reviews and prices online? But as Target’s Casey Carl, president of multichannel, wrote in a post in September, “We love showrooming — when Target gets to book the sale.”
Providing free Wi-Fi is a way to keep the consumer happy in-store and encourage use of a retailer’s own mobile sites and apps.
Smartphone Savings Programs: Last year, Target rolled out a digital savings program, Cartwheel. It's a website and smartphone app that allows users to see discounts they can access if they go to the store with a bar code generated by the program. To get the discount, customers just need to bring the code on a printed page or on their smartphones. "Start saving on the things you already buy at Target," is how the website explains the program.
Voila, reverse showrooming!
Eighty percent of the program’s traffic comes from mobile, according to a company spokesperson, and 50% of users have completed purchases via Cartwheel.
The program is also integrated with social media to encourage sharing of deals and products.
Similarly, CVS has responded to mobile shopping by creating a better mobile customer experience. The pharmacy allows consumers to store an ExtraCare loyalty card on their mobile device to use at the register, and has created a Drug Interaction feature on its app to allow consumers to scan over-the-counter drugs for adverse interactions.
There is also a list-making feature on the app for pre-store research.
Bringing Social And Online Trends Offline: Taking the online retail research people are doing and weaving it into offline promotions is perhaps the most overt way to capture the attention of reverse showroomers. Over the summer, Nordstrom rolled out an in-store program that promotes the retailer's top-pinned items on Pinterest. Forever 21 has done something similar but in their case, they're highlighting "trending" clothing in store that's seeing the most interest on their own e-commerce site.
Online Ordering, In-Store Pickup: A variety of retailers, from Target to Toys "R" Us and The Container Store, have integrated their online and offline stores to provide consumers with online ordering and in-store pick-up options. Sears has even recently introduced online ordering, with drive-thru pick-up. The idea is to offer convenience — giving consumers what they want right away, without dealing with in-store frustrations. Again though, this is only effective if the right products are available in-store, and offline staff effectively support pick-up.
Notably, Amazon and other big online retailers are also beginning to invest in new pick-up options to potentially cut down on wait times for packages. They recognize that bricks-and-mortar stores have an advantage in this regard.
Customer Service: This holiday season, Best Buy rejected the idea that showrooming is necessarily a bad thing and encouraged people to come into the store to get an up-close look at electronics products. As a consumer electronics company, Best Buy was under particular threat from the showrooming trend, which is most pronounced for high-priced items. Part of Best Buy’s new welcome-to-our-showroom approach has focused on having a more knowledgeable and responsive sales staff, something online retailers will always be hard-pressed to compete on.
Without a doubt, customer service is an area bricks-and-mortar chains desperately need to improve.
Overall, nearly three out of five consumers told Deloitte they consider themselves better informed about pricing, discounts, and product availability than sales associates, meaning there is huge room for improvement in terms of in-store assistance. More than half said knowledgeable in-store staff would make them more likely to buy in-store.
Best Buy reported terrible sales over the holidays, despite all the talk about fighting showrooming head-on, which also included an aggressive price-matching policy. The company blamed “supply constraints” for the fourth quarter disaster. According to an analyst, Best Buy's problem is more basic than that: the store is no longer selling the products people want to buy.
Retailers can create a great mobile app and train their sales people well, but without the right products, there’s no omnichannel solution, or price-matching policy, that will give them an edge.
The Latest Initiatives
As retailers look forward to 2014 and the next holiday quarter, the trend is toward even more creative "omnichannel" solutions that bridge the worlds of offline, online, and mobile.
Developing a "mobile enterprise or mobile store strategy" was retailers’ No. 1 area of investment for the upcoming 18 months, cited by 43% of respondents, followed immediately by expanding multichannel initiatives, according to a 2013 RIS Retail Technology study.
Both of these responses ranked above developing a mobile commerce strategy, i.e. working to drive conversions on mobile.
This makes sense since mobile accounts for only a small slice of incremental sales, while offline sales still make up the bulk of purchasing.
Retailers are trying to drive more of these offline sales through technology investments.
Mobile point-of-sale technology, or the use of tablets and smartphones as mobile registers, is one increasingly important piece of a mobile store strategy. More than half of retailers said last year that they planned to invest in mobile register systems by the end of 2013 or were already investing in them, according to the study.
Mobile registers help retailers track the customer's shopping activity online and offline, and develop more advanced customer relationship management programs, such as loyalty-based coupon and incentives programs. Mobile registers can also help retailers implement more seamless and convenient in-store checkouts. Sales staff can swipe customers' credit cards wherever they are on the sales floor and help them avoid lines.
Beacons are getting a huge amount of notice for the myriad ways these low-cost small pieces of hardware can interact with consumers’ mobile devices in-store and encourage the completion of purchases. The key to beacons is that they transmit Bluetooth low energy signals, which are able to detect a phone's exact location within a store (e.g., the swimsuit aisle). We recently published a report with an overview of what beacons are, and how they are being implemented in retail.
Beacons offer a diverse set of potential applications to offline retailers, from hands-free payments to dynamic store guides, item locators, and loyalty programs.
Millions of Apple customers already carry smartphones running iOS 7, the latest version of the company's smartphone operating system. All these devices are already compatible with Apple's iBeacon technology, meaning they can receive notifications and receive data transmitted by in-store beacons attached to walls or countertops.
RFID tags — the acronym stands for radio frequency identification — are also known as intelligent barcodes. They will be a key component of the in-store technology boom. These can connect with beacons, for example, and allow someone to check out of a store without ever having to have any merchandise swiped.
Despite all the dark reports about showrooming, this is actually a time of feverish innovation in retail.
There's a small retailer in Seattle that allows consumers to swipe their smartphone over an item's code and have it robotically transferred into the dressing room for them to try on. Consumers can also swipe their cards at mobile card readers to buy. The human sales associate part of the equation is completely bypassed.
For retailers with an informed client base, this may be a good strategy.
For others, as we discussed before, sales associates could be what gives the offline retailer a competitive advantage.
But understanding the importance of improving service and convenience across channels doesn’t mean the effort will be easy to pull off.
Forty-five percent of respondents to the RIS study cited earlier said retiring legacy systems — such as traditional checkout registers — would be the top challenge over the next three years. This was the number one response to the question of what retailers faced as their top challenge.
The omnichannel effort is about transitioning the retailer from being more than a purveyor of goods to a robust resource for consumers. Retail must be able to provide customers the most convenient and price-competitive shopping experience they can, in-store and online, but also be their go-to source of information and advice in their categories.
It's a tall order. But one that traditional retailers are actually in a better position to execute on than online-only e-commerce players.
THE BOTTOM LINE
Showrooming may be big, but reverse showrooming is even bigger. Retailers are realizing how significant the opportunity is as they they work to capture sales from those who research online but buy in store.
To do so, they are paying special attention to how consumers shop online and on mobile and what resources they can offer to keep them from completing purchases with competitors.
Stores are offering a suite of convenient services to capture more reverse showrooming sales: free Wi-Fi, smartphone saving programs, better customer service, and online ordering with in-store pickup.
Creative initiatives for the connected in-store experience keep popping up. From mobile register systems, and smartphone-powered loyalty programs and beacons for seamless checkout, to robotic arms delivering clothing into dressing rooms.
Retailers are thinking of themselves less as purveyors of goods, and more as digital and real-world shopping resources.
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