E-file your Income Tax Returns for FREE

E-file your Income Tax Returns for FREE

Showrooming

Reviewed by Sweta | Updated on Sep 30, 2020

Catalogue

Introduction

Showrooming refers to the practice of checking out a product in a retail store before buying it from online retailers. Shoppers tend to take advantage of low online prices as compared to the showroom price.

Is Showrooming Common?

Showrooming is extensively practised in the shopping for electronic devices and books. Showrooming benefits online retailers since they are able to offer lower prices than brick-and-mortar retailers for identical products because of their lower overhead. Retailers are faced with a showroom maintenance cost, staff costs, and so on. They face a loss of customers due to showrooming.

How Does Showrooming Affect Retail Stores?

The advancement in smartphone technology has made showrooming easy, facilitating ease of placing orders. Shoppers can check online prices and even place product orders online with great flexibility.

Online retail space offers deep discounts compared to brick and mortar retailers. The showroom retailers are offering products online and in-store pickups to combat showrooming.

Brick-and-mortar retail brands, such as Walmart and Target, are using tactics, such as offering in-store pickup for online purchases, thereby avoiding shipping charges and offering select products exclusively in their stores.

Retailers are also using showrooms to build customer relationships, offering them membership and redeemable coupons.

Electronic retailers have been the most vulnerable to showrooming since a majority of consumers still prefer checking the look and feel of electronic products before purchasing.

Another category of retailers who are vulnerable to showrooming is the traditional brick-and-mortar bookstores, especially those independent stores where prices are higher than online stores, such as Amazon.

Smaller stores and boutiques may combat showrooming in new ways. Some examples include holding special sales, selling in-store merchandise via their website, creating membership clubs, and promoting a local shop culture.

Despite showrooming acting as a bane for the brick and mortar retailers, these small stores and boutiques have modified the business model and gained the customers who were lost to the online retailers.

Related Terms

Recent Terms