10th February 2012
Retailers wary of 'showrooming' shoppers who visit stores then use mobiles to hunt for online bargains
Price-conscious consumers are increasingly using mobiles to hunt for bargains, stoking fears among retailers that the only footfall they may see in future will be from people checking out products in person before buying online from rivals.
Intersperience has researched how consumers use mobiles in a retail context as part of its ‘Internet on the Move’ project which is currently underway in the UK. Pathway findings indicate that mobile internet is fundamentally changing the way people shop.
Although consumers are clear that they still enjoy a physical shopping environment where they can touch and try on goods and ask assistants for advice, there is a growing tendency for people to visit stores as much for enjoyment and research as for commerce.
Our researchers found that one in three people now use smartphones to surf the net for price comparisons, product reviews or to check availability of goods. We found that almost 20% use their mobiles to call up rival websites and compare prices while they are in a store - and that 30% of the people who do so actually complete a purchase from a rival while they are still standing in the store.
The growing influence of mobile internet and increased adoption of smartphones, lies behind the emergence of the ‘showrooming’ phenomenon (where shoppers visit stores to check out goods only to buy the product online, frequently from a rival at a lower price).
Its influence is increasingly being felt by high street retailers prompting debate on how they can re-engineer their price, product and service propositions to persuade shoppers to spend money in-store instead of online. The reaction so far has varied from defensive tactics such as preventing shoppers from scanning barcodes with smartphones in order to check prices to more consumer-friendly tactics. The latter include smartphone apps which connect a user with a salesperson when they enter a store and allow them to send and receive details of special offers, discounts or new lines by their favourite brand.
From a consumer’s perspective, smartphones can help tip the balance of power in their direction, as they can go into a store armed with up-to-the-minute knowledge of prices, user reviews and special offers. This directly challenges the customer service proposition, particularly in the way staff are trained in product knowledge. It also raises difficult questions for retailers at a strategic level in terms of their responsiveness on price.
Our ‘Internet on the Move’ project, which will be reported in May, compiled case studies of people’s experiences of using mobile internet in stores. One participant commented: “It’s like a friend who helps you with deciding and saving some money with its inputs, perfect suggestion and making a decision for us to take forward.”
Another participant explained that his online price comparison search failed to secure him a discount on a camera at a major UK retail outlet - a common experience. He said: “If they would have given me the camera at a cheaper price or with freebies, like a tripod or cover case [I would have bought it there] I did tell the guy who was showing me the camera... He said he was helpless and can’t bend what is on offer...So I decided to purchase it online.”
Paul Hudson, Chief Executive of Intersperience said: “Mobile internet is not just changing our shopping habits; it is altering the power balance in the consumer-retailer relationship. We are seeing the first wave of change in the retail sector but we predict it will become a powerful tide. The onus is on retailers to make in-store shopping more attractive and rewarding to shoppers, from loyalty bonuses to limited edition goods, price matching and more personalised service.”
He added: “So far the chief effect of mobile internet in a retail context has been to drive shoppers towards online purchasing but the power and convenience of mobile internet could be used creatively to enhance and improve the in-store proposition. Regardless, the evidence is overwhelming that consumers increasingly regard their mobiles as their favourite shopping companion.”
'Internet on the Move’ is a syndicated study which includes qualitative research (20 in-home interviews with a cross section of ages, including teenagers and owners of different devices) and quantitative research (1,400 response survey including 400 12-17 year olds and 1,000 18-60 year olds). The report will be released in May 2012.
Please contact Paul Hudson (paul.hudson@intersperience.com) for further details.
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