How can Retailers overcome the threat of Showrooming Essay

Akriti Arora

How can Retailers overcome

the threat of Showrooming?

Akriti Arora

• Its Diwali season and Mrs Mehta

wants to buy Diwali gifts for her

family.

• She goes to the nearest

departmental stores and browses

for what is the best and what

suits her pocket.

• She chooses a pair of jeans for

her son, but the only problem is

it gets a little out of her budget.

• She then goes back home and

buys the same pair of jeans from

an online store.

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What is Showrooming?

? Showrooming is the concept where

shoppers try experiencing the products in a

store and then go back and buy it online.

? Customers believe that the prices of the

products bought online are much cheaper

than the prices offered at brick and m ortar

Stores

? High prices at stores are because of in –

store overheads and sales tax mostly.

? Electronic Vendors are most vulnerable to

showrooming

Fact Column:

? 58% of the smartphone

users regularly do

showrooming while

shopping.

? Show -roomers account

for just a 6%, they

make a huge chunk

(about 50%) of the

global online purchases

? In China, 24% of

respondents identified

themselves as show –

roomers

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Showrooming at global level

PWC investigate showrooming

behavior and find that 86% internet

users in China and 68% in the globe

have showrooming behavior .

Showrooming in India

Recent trends show increasing rate of showrooming in India as well. Online sites like

amazon, flipkart , myntra pose a threat to Indian Retail Stores like Reliance Digital.

The Top 3 reasons behind this

phenomenon are

(1) Desire of lower price

(2) Desire to have product touch

(3) Convenient home delivery

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Factors that affect Showrooming

These are some of the factors that

might lead to decision of

showrooming.

Considering these factors, I have

narrowed down to some

prominent constructs and

understood their impact on

decision of showrooming among

120 respondents in Nagpur

Region.

1. Price Savings

2. Better Quality

3. Good Deals

4. Reviews

5. Free Shipping

6. Non Availability in store

7. Product Information

8. Time Availability

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Demographics of 120 respondents

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Age vs Showroomer Cross Tabulation

The age bracket of 18 -25 Agree to be a showroomer

The age bracket of 26 -30 Strongly Agree to be a showroomer

Age * On a scale of 1 to 5 how likely re you to be a showroomer Cross -tabulation

Count

how likely are you to be a showroomer

Total 1 2 3 4 5

Age

18 -25 3 5 18 47 20 93

26 -30 0 1 3 6 13 23

31 -40 0 1 1 0 2 4

Total 3 7 22 53 35 120

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Annual Income vs Showroomer Cross Tabulation

Annual Income group of less than 3LPA and 7LPA are likely to showroom

Annual income * On a scale of 1 to 5 how likely are you to Showroom Cross –

tabulation

Count

On a scale of 1 to 5 how likely are you to

Showroom

Total 1 2 3 4 5

Annual

income

Less than

3,00,0000 3 4 15 26 7 55

3,00,000 –

7,00,000 0 1 3 13 4 21

7,00,000 0 2 1 11 12 26

10,00,000 and

above 0 0 3 3 12 18

Total 3 7 22 53 35 120

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Data Analysis

On Scale of 1 -5 (1=Strongly Disagree, 5=Strongly Agree) How likely are

you to be a showroomer?

Approx. 73.4% respondents are involved in Showrooming.

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Data Analysis

In which of the following categories, you are more likely to be a showroomer?

Respondents most likely find themselves showrooming in Electronics

section and the least in Furniture section

Apparels and Footwear have the maximum percentage of both

showroomers and non -showroomers

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Data Analysis

Which of the following factors affect the decision of showrooming?

Good Deals is major factor that affects showrooming

It is followed by Product Information and Time Availability

Majority Strongly agree that P rice Savings is prominent reason for their behaviour

of Showrooming

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Major Factors

Price Savings Good Deals Product

Information

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Why is showrooming a threat to retailers?

Hits the sale numbers of retail stores

Affects prices of product universally

Affects Footfall conversion rates

Affects Customer Base and relationship with customers

Affects Average Ticket Size

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Why is showrooming a threat to retailers? Fact Column:

? A recent survey

conducted Edgell

Network and eBay

revealed that 80% of

retailers foresee a 5%

decline in sales on

average as a result of

showrooming

? Showrooming was said

to be collapse behind

UK Photography chain

Jessops, and target

decisions to

discontinue carrying

the amazon kindle

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What do respondents think can prevent them from

Showrooming?

Inadequate product knowledge and in -store sales service happens to be major

reasons that refrains customers from showrooming.

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How Can Retailers overcome the threat of Showrooming?

Experience and Entertainment

•Vanity buying experience which gives status symbol

•Continuous Promotional activities with focus of consumer pull

Superior Customer Service

•Out of the way customer service can retain existing customer

•Excellent Customer Service can attract new customers

Product Exclusivity

•Making the product exclusively available at the store will attract

customers

•Ex: Designer Dresses

Going to your Customer

•Reaching out to customers directly

•Door -to -door sales may help boost customer sales

Attractive Packaging

•Customized Packaging

•Luxurious look on the out side

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Thank You

Akriti Arora

About Me

• Name: Akriti Arora

• Age: 26

• Educational Qualifications: PGDM in

Retail Management from K J Somaiya

Institute of Management Studies and

Research, Industrial Engineering from

Ramdeo Baba College of Engineering

and Management

• Professional Experience: Senior

Engineer In Blue Star Limited, 13

Months, Intern in ICICI Prudential AMC

and H ealthcoco Technologies Pvt Ltd

• Skills: Analytical Skills, Leadership

skills, Communicative skills, Creative