The secrets of ‘showrooming’

11/30/2012 - Results from the annual Kellogg Shopper Index are in, and the findings on “showrooming” — browsing for merchandise in a retail store, then ordering the items online — are sure to give retailers something to think about this holiday season. According this year’s survey, many showrooming shoppers are not driven there by price alone, but by an unsatisfactory in-store experience.

Supported by the Kellogg Center for Global Marketing Practice, the Kellogg Shopper Index is a national survey that collects data from an online panel of more than 1,900 participants. The purpose of the index is to develop a comprehensive model of consumer spending behavior and explore the psychological and financial factors that determine how and what people buy.

Customer service matters
This year’s survey found that 59 percent of participating shoppers said they received poor or average service in the stores where they’d recently shopped. Among shoppers who said they engaged in showrooming, 40 percent reported that they actually never intended to buy online, but they were driven there after experiencing poor customer service and support in stores.

“The relationship between in-store service quality and shoppers’ propensity to engage in showrooming, especially when they had not intended to, is consistent with our knowledge on the psychology of the consumer and about where, how and when they shop,” said Associate Professor of Marketing Derek Rucker.

“The showrooming conversation typically focuses on price as the impetus to purchase online,” continued Eric Anderson, Hartmarx Professor of Marketing at Kellogg. “While the growth in online shoppers is clear, our data shows that there is still a robust segment of consumers who prefer to shop bricks-and-mortar stores. For retailers, this reinforces that how consumers want to shop is as strategically important as the price they are offered, and underscores the importance of face-to-face customer service.”

Other findings
The 2012 Kellogg Shopper Index also found that:

• Shoppers are more optimistic this season. 59 percent of respondents report that their household financial situation will be better in the next year. More than a quarter said they were planning on spending more on holiday gifts for others compared to last year. 
  
• Black Friday store shoppers are more likely to be young (under 24 years of age), educated women who are married and earn between $25,000 - $100,000. 
  
• Female shoppers are more loyal to their favorite stores, but are being lured into low-touch online channels because of poor or frustrating in-store experience. 
  
• Men with higher education levels and higher incomes are more likely to seek discounts by showrooming and mobile buying than women.

“As consumers continue to migrate into online and mobile channels, there is evidence that retailers are digging a hole that will be harder to get out of, as word-of-mouth about poor in-store experiences drives away more of their core shopping loyalists,” said Clinical Associate Professor of Marketing Richard Wilson. “These shopper insights confirm that top product brands and their retail partners are likely at a major crossroads in the evolution of multi-channel routes to market.”

Further reading:

• Going mobile on ‘Cyber Friday’
  
• Kellogg Shopper Index