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Lets Hold the Panic About Retail Showrooming – It’s Driven by Research Errors

Posted by Doug Garnett September - 12 - 2012 - Wednesday

I discovered an excellent blog post (link here) this week about marketers being mis-led by major research mistakes. One of his main examples? How “showrooming” fears have been blown out of proportion..

Showrooming Is…? In case this is new to you, showrooming happens when someone looks at a product in the retail show room then purchases online (most often with their smartphone). Amazon is rumored to thrive on showrooming and even released an app so that bookstore browsers could scan bar codes with their phones then have Amazon ship them the books.

A few retailers have seemed to provide substance to fears when they have blamed poor financial results on showrooming. All this is fed by articles from digerati that are desperate to claim they have destroyed retail.

And that gives us a classic case of FUD – Fear, Uncertainty, and Doubt – about the impact of in-store mobile searches. But…the truth is stranger than FUD. So let’s start by turning the tables…

“THREAT ALERT…CAN AMAZON SURVIVE REVERSE SHOWROOMING?”. I reverse showroomed last weekend when I shopped printers at Amazon to evaluate options, then went to Best Buy and purchased the printer I wanted. In this case, I needed to check out options and focus my interest. But I wanted the printer RIGHT THEN to keep ahead of the curve getting things in place for my son’s freshman year of high school.

“THREAT ALERT…AMAZON STRUGGLES BECAUSE DEALS AREN’T GOOD ENOUGH!!!” Suppose I’m in Best Buy and the product I want is sitting on the shelf for $29.99. How much do I need to save through Amazon to put up with waiting several days for delivery? What about a $1,500 HDTV. How much do you need to save to have Amazon deliver it (without setup)?

The usual drips and drabs of online discounting aren’t enough (for me). So I buy online when there’s a reason – selection, dramatic discount, or pure simplicity of putting in an order while I’m at an airport.

Neither of these all-cap headlines really suggests an issue that threatens Amazon’s well being. But my point is that the world is far more complex than the one-dimensional thinking that has led to all cap headlines about showrooming. How did research mis-lead us here? Read on.

Showrooming And Research Errors. The article noted in my opening paragraph identifies two research mistakes that are quite common in today’s tech battles. Let me offer them in my own words:

1. We often confuse “have done behavior x” with “do behavior x all the time”. As in, confusing “I once saw something in a store then checked price on my phone” with “When I see something in the store I always check price on my phone then buy the absolute cheapest I can find even if it’s only a penny or two.” Big difference between those two.

2. We rely on questions that are asked of consumers that consumers can’t answer truthfully. Ask any criminal lawyer about how accurately people recall things and they’ll tell you recall of even important things is exceptionally poor. And recall on shopping habits? Horrific. Sadly some researchers don’t or won’t figure this out and ask anyway. (Shouldn’t we need “research licenses” before using Survey Monkey?)

How These Errors Feed Showrooming Fears. Showrooming fears have been driven astronomically out of proportion by these errors.

In the first error, industry decided showrooming is a serious issue based on finding that a lot of people “somewhere, sometime showroomed”. Except, as Mr. Rubinson notes in his post, that doesn’t mean scary trend. It only becomes a scary trend if people do it “a lot”.

And the factual truth he reports is that only 1-3% of iPhone users price compare on their phones an average of 1-2 times per month. In other words, 97%+ aren’t even doing this price comparison once a month.

In the second error, Mr. Rubinson notes that Media Post asked consumers to “predict the retail environment in 2020″. Huh? Retail experts can’t predict that – and they know about a lot of possibilities that consumers don’t. But consumers will ALWAYS answer whatever you ask so Media Post got answers and they said showrooming was a big problem. (Do people answer this way from years of training to “fill in the blank”? But, truth is that most research doesn’t even let us tell the truth with an “I don’t know” answer.)

The Consumer Market is Robust Enough for Both Online and Brick & Mortar. In reality, the market is robust enough for everybody. And while high profile retail closures are very noticeable (e.g. Borders Books), there are far, far more internet store closures than retail closures. Just consider how easily and quickly competitors can knock off an internet store.

I think the truth is that smartphones help the retailer – instantly. Having a mobile device in the store with me often means I spend MORE in the store on a given shopping trip. Why? Because I can answer my questions then and there – instead of having to come home to call friends or check the internet.

So shake off that showrooming sense of doom and dread and wake up to something far better. Like, what would happen if you really embraced the combination of retail and internet. Just this week Jerry Storch, chairmand and CEO of Toys-r-Us, observed that “The future belongs to brands that build best the consumer-facing network, incorporating stores, Internet, mobile, social and local components.” (Link Here.)

Now THAT’s a vision worthy of pursuit. And Amazon should fear retailers who crack that code. Because they’ll reap amazing sales power from the show room that Amazon can’t even touch.

Copyright 2012 – Doug Garnett – All Rights Reserved


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Doug Garnett, DRTV and Technology Industry Expert

Doug Garnett is founder and CEO of DRTV agency Atomic Direct and a leading expert on innovative uses of DRTV, infomercials and other in-depth TV and non-TV messages to build brand and drive sales.

Doug has been working in and around the technology field for 27 years. After starting in aerospace, he spent 5 years selling and marketing supercomputers. Since shifting to advertising, his clients have included AT&T, IBM, Apple, Disney Mobile, Ugobe, Presto, and Netpliance.

Doug sits on the editorial board of Response Magazine, is an adjunct professor of general advertising at Portland State University, and is a member of the Jordan-Whitney Greensheet Panel.

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