"Showrooming" is more about research than price comparison
It reads like every retailers' worst nightmare: Potential customers walk in with small devices capable of comparing the price of every product to one listed somewhere else. They wander through the aisles with these devices at the ready, simply waiting to find a product, rub their grubby little hands all over it, order it via the device, and then walk out without buying anything. They're parasites, and they simply must be stopped.
That's what conventional wisdom dictates, anyway. But a series of studies show that many of these so-called parasites aren't actually "showrooming," as the practice described above is sometimes called. They're simply trying to become better-informed consumers by learning more about a product before purchasing it.
According to a study released by the Columbia Business School and Aimia, a loyalty management company, only 6 percent of people using their smartphones in a store do so with the intent of purchasing a product online. (The study dubs these online shoppers "exploiters.") Some 60 percent of shoppers are said to be more likely to purchase a product in-store if they can find online reviews for the item, the study says. Like the millions of microbes that live in your gut, smartphones help retailers more than they hurt them.
Another study, this one from Krillion, a local shopping platform, says that more people are researching products and brands before they purchase something than ever before, especially on smartphones. The study says that 50 percent of shoppers research products 50 percent of the time when they intend to purchase something from a local store. Large companies like Best Buy or Target might not be the only ones to benefit from smartphone-equipped shoppers -- the ability to find information with a smartphone could benefit small businesses, too.
Both studies stress the importance of online reviews, which might explain why so many companies tend to pay for fake reviews -- or simply to have bad reviews removed -- on sites like Yelp or their own website. The Columbia Business School study says that 60 percent of smartphone-equipped shoppers are more likely to purchase an item in-store if they can find "helpful online reviews."
It shouldn't come as a surprise, then, that Gartner expects 10 to 15 percent of all online reviews to be fake, paid-for reviews by 2014.
Are some people wandering into stores, comparing prices with their smartphones, and purchasing the product through Amazon or another online retailer? Absolutely. But it seems that the showrooming problem isn't as widespread as the horror stories would have retailers believe, and that smartphones can actually benefit shoppers and retailers alike.
[Image via Thinkstock]