80% of Retailers Will Be Affected by Showrooming this Holiday Season

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80% of Retailers Will Be Affected by Showrooming this Holiday Season

11/20/2012
Brick-and-mortar retailers are painfully aware of the impact of showrooming – the act of consumers using their mobile phones in-store to compare prices with competing retailers – on their bottom line. However, only 10% of retailers have strategies in place to combat showrooming, according to a research study just released from Edgell Knowledge Network (EKN), in partnership with eBay Local.
 
Showrooming is a year-round occurrence; however holiday season sales are a leading indicator of retail industry performance and consumer sentiment. Focusing on its expected impact during the holiday shopping season provides a window into what its overall effect will be in 2013 and beyond. The research study is available for download here.
 
The research report includes good news for holiday sales overall, as 63% of merchant respondents expect 2012 holiday season sales to show an increase compared to the 2011 season. According to the survey's findings though, showrooming will take a toll on many retailers' performances:
·         80% of retailers expect to be impacted by showrooming; they expect the average loss of sales to be 5% – a significant number, given the low margins in many retail segments.
·         Electronics and appliances were the unanimous choice as the retail format most vulnerable to show­rooming.
·         Price-matching and improved cross-channel integration emerged as the most effective strategies to counter showrooming. However, only 25% of respondents reported full integration between their store and online channels, and only 15% share their inventory online – indicating a major opportunity for retailers to take measures to lessen showrooming's impact.
 
In addition to the impact of Showrooming on the industry, the report highlights the changes the industry is undergoing as a consequence of growth in digital channels
·         3-year horizon sees shift in revenue contribution by channel. Mobile’s contribution to revenue to grow 48% year on year, from 1% contribution in 2012 to 4% in 2015. Store contribution to decline 2% year on year, from 82% contribution in 2012 to 77% in 2015.
·         The biggest opportunity for growth is believed to be in online sales – 32% of respondents expect growth of 10% or more
 
"Showrooming is a phenomenon that's here to stay. One in four shoppers used their mobile phones to compare prices while in the store during the 2011 holiday season, and those numbers will only grow," said Gaurav Pant, Research Director, EKN. "But the good news is that retailers can put strategies in place to help counter the effects of showrooming by engaging showroomers actively, integrating their online and offline channels, and prioritizing their investments to counter showrooming."
 
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