This article was originally published on reverb, Drake Cooper’s reflections on advertising, creativity, and trends. Read more.

Retail and Showrooming: Keeping Buyers In The Store

“Consumers have shifted their path to purchase to include the store as a step, not the final step. This is likely to only increase over time.”

-Group M Media

Nearly 50% of people report to using smartphones while shopping to compare the price of an item on the shelf to the price of that item online. This rising behavior trend—“showrooming,” as they say—is having a notable effect at in-store retail and is probably part of the reason why ecommerce grew at nearly three times the rate of in-store last year (+13% compared to +5%).

A recent Group M report offers some insights regarding what actual pricepoints entice showrooming and what retailers can do to help manage this trend.

Pricepoints

According to the study, when the online price for an item is 2.5% lower than the store price 45% of customers say they would leave to buy the item online. Furthermore, when the pricepoint is 10% less online, a whopping 75% of consumers say they would leave the store and turn to the web.

It’s important to remember that in retail what consumers say they will do, and what they end up doing, are often at odds. People like immediate gratification (see below). And the study says nothing about shipping costs, which can vary per online outlet. But it’s fairly safe to say that if shelf prices are north of 5% over the online price for the same item, retailers are at risk of showrooming.

Two Quick Insights for In-Store Retail

– Must Have Now: Certain products we don’t want to wait for. In the Group M study headphones were one of those. In every business there are certain products that buyers want now. Identifying what those are among a store’s shopper base provides multiple opportunities—from margin protection to loss leader strategies.

– Sales Associates: Turns out, we respond to the sales staff. Customers who interact with a sales associate in-store are nearly 13% more likely to purchase in-store.

The complete Group M study can be found here.