New data suggests "showrooming" on Amazon might not be killing physical retail after all

By James Robinson , written on March 12, 2014

From The News Desk

Early in February, Amazon rolled its ‘Flow’ feature into its main iOS app, allowing shoppers to scan an image with their camera of a product in a physical store and have it added to an Amazon shopping list.

We tend to think about ‘showrooming’ - the practice of browsing in real life and purchasing online - as the mortal enemy of retail shopping. The end of local bookstores!

According to data provided to PandoDaily by ShopAdvisor, and including details of 128,000 items people are scanning in store to purchase later (some $8m of potential transactions), the truth isn't as scary as some retailers might fear.

Big ticket electronics items - averaging out at $356 a pop - accounted for just five percent of items scanned, but thirty percent of the overall value of items. Which is understandable. When you’re paying several hundred dollars for an iPad, savings of $15-$150 on Amazon become hard to deny. Health and beauty products accounted for 15 percent of all scanned items and toys accounted for 14 percent, with average retail prices of $29 and $26 respectively. Health and beauty is largely a brand, rather than retailer, driven sector and toys are expensive and disposable, an area where Amazon can offer deep and welcomed discounts. Amazon still seems perceived as a place to buy smaller things. Seventy percent of items scanned priced between $20 and $50.

The supposedly detrimental aspect of showrooming, though, the part where it wipes out neighborhood bookstores and record shops, doesn’t pan. Books accounted for 10 percent of all items scanned. Movies, music and video games hardly registered, accounting for a combined four percent of the results.

Amazon is a big and aggressive market figure that has not acted without detriment and is not without its detractors. But 20 years nearly into its existence, people still seem fond of buying in person. A study from Synqera out last month of holiday season shopping habits for 1,024 Americans found that 69 percent had done at least half of their shopping in a physical store. Last March, mobile analytics company Placed published its findings which showed that the brands most susceptible to being ‘showroomed’ were some of America’s most ambivalently appreciated companies: Sears, Bed, Bath & Beyond, Barnes & Noble and etcetera. According to Gallup’s conversations with 2,599 Americans in mid-November 2013, only six percent had showroomed in the last month.

The message from ShopAdvisor’s data is clear: product areas where people feel more connected to brand than store are most ripe to lose business to Amazon’s across the board discounts. If we liked Target more, maybe we’d spend more money there. But there’s a secondary message poking around under the hood. The cultural worry that through showrooming, Amazon will manipulate independent retailers to do the hard part and then swoop in and take the sale, isn’t as relevant.

[Image via Thinkstock]