BrainTrust Query: The Fallacies Behind Showrooming Hysteria
Through a special arrangement, presented here for discussion is an excerpt from an article from the Joel Rubinson on Marketing Research blog.
Book authors, trade journal reporters, consulting firms, and influential bloggers can fill marketing teams’ heads with some really bad ideas. As these stories reverberate around the echo chamber, they seem to confirm each other and voila, a wrong belief becomes entrenched. Five or ten years ago, pundits’ predictions about TV’s demise were wrong. Today, current scare tactics about showrooming appear equally flawed.
Usually, this starts with a bad marketing research mistake turned into a compelling narrative. The two classes of marketing research mistakes I want to focus on here are:
- Confusing incidence with market share
- Asking questions that people cannot answer
Confusing Incidence With Market Share
The incidence of people who ever engage in a disruptive activity can really scare marketers. For example, looking at the percent of people who watch video online or watch timeshifted TV on their DVR and presumably fast forward through commercials led to predictions of TV’s demise. However, looking at SHARE of viewing minutes tells a completely different story. A Nielsen cross platform report in Q1, 2011 shows the incidence of watching shows on a timeshifted basis was about a third of TV viewers but only 6 percent of viewing minutes. And while half watched video on the Internet, it accounted for less that 5 percent of minutes. As with food, light snacks rarely replace full meals.
In the same vein, anxiety around showrooming usage has occurred with studies such as one by comScore in April 2012 that showed 35 percent of respondents claim they have showroomed. However, how MUCH are they doing this? A joint study by IDC and Onavo reports that key price comparison shopping apps are only used by 1-3 percent of iPhone users an average of two times per month. A study reported on in Mediapost adds that about half of showrooming leads to purchases in that same retailer physically or online. Incidence of showrooming? Scary! Share of purchases diverted by showrooming? Still really low single digits.
Asking Questions People Cannot Answer
At the same time, warnings around TV’s demise were supported by surveys of people underestimating their daily TV viewing hours, overestimating their Internet time, and also overestimating their willingness to view TV ads. (Asking someone whether commercials are annoying naturally tilts negative.)
On the showrooming side, one of the worst marketing research abuses I have seen, supporting that a tsunami of showrooming was coming, was reported on in Mediapost where the study asked consumers about retailing practices they expect to see by 2020. Really? People are concerned about stretching their food dollars to the next paycheck and marketers are abdicating their responsibilities for directing a company’s future by just asking consumers straight out about showrooming in 2020? See how one bad story can reinforce the other in the echo chamber?
This blog is not an indictment of marketing research. In fact, it is the opposite; it is a statement of the importance of basing marketing beliefs on grounded insights from marketing research executed in a world class way. Let us shift marketing research back to the professionals and let’s not break some simple rules.
Discussion Questions
Is the showrooming phenomenon overblown? Are many of the measures supporting showrooming predictions weak or flawed? Do you agree that market research is often flawed by overestimations of incidences as well as just unanswerable questions?
A segment of consumers comparison shop, and I don’t think mobile phones have changed that behavior much. At best, mobile phones might save the comparison shopper some time, but they were going to do the research by some other means anyway.
I’ve used my iPhone to check prices while shopping in a store, but the majority of the time I’ve already done my research at home online.
And just via observation, I can’t think of a time I saw other shoppers using their phones to scan barcodes. None of my friends do it either.
Showrooming is an issue, but it’s not a dire issue that’s leading to the demise of stores. The brick-and-mortar experience continues to thrive, despite some overblown headlines.
Our Futurebuy research shows 22% of smart phone and tablet users acknowledge “showrooming.” When you discount that for the fact a little over half the US population owns a device that is perfect for showrooming, say 10% fess up to showrooming. That’s really not an explosion – YET.
Do we think showrooming will kill retail stores? No. Is it disruptive? Yes. There’s no going back to the days when product offers and pricing were tricky to compare from store to store. Shoppers live in a full disclosure, immediate access to information world. Retailers and their supplier partners need to think omnichannel and ensure strategic linkages and tactical integrity across outlets and information points. Those that figure out how to use showrooming to the positive will be the winners.
The showrooming “phenomenon” is definitely overblown. Like so many industry topics of the present and in the past, folks with a keyboard, pen, or voice, are misinterpreting or misunderstanding data to build a case that something small is something big. There is no boogieman folks, sorry.
Joel raises a good point: in the need to say provocative things that get headlines, many authors and pundits over-hype certain trends (full disclosure: as a former analyst I know this well). Unfortunately in my experience headlines such as ‘people are using their cellphones occasionally to check prices before buying expensive goods” doesn’t tend to grab attention or start an important debate.
The balance here is people often need to be shocked out of their business comfort zone in order to react before a crisis happens (how long did Best Buy look at Amazon’s DVD sales and say, ‘it’s just a fraction of the total number of DVDs sold,” or look at streaming and say, ‘it’s a tiny percentage of the viewing audience”? My point is sometimes by the time a trend becomes a tsunami it’s too late for a company to react.
So the real question is, I think, how do you tell a real trend from a fad? How do you have a balanced discussion from a screaming headline? Joel is right, data can be manipulated to say what you want it to say and we all have trouble being honest about ourselves. You really do have to use a range of research techniques and compare and contrast to understand what’s likely to last and what isn’t. You also have to know your customer base and whether they are early or late adopters to figure out of the key trends, which ones will hit you when. It’s a lot of hard work — not as sexy as writing a headline that says “the demise of TV.” No wonder no one ever writes about this stuff.
As the author of 13 Reasons Your Brick and Mortar Store is Susceptible to Showrooming http://www.retaildoc.com/blog/amazon-showrooming-brick-and-mortar-retail-store-susceptible/ I must take exception to this. As someone who works with major brands every day – I think 1-3% of shoppers using pricing apps is at best naive.
Millenials in particular are thrifty, they have no qualms about using a b&m retailer to shop for their online purchase, or find it cheaper. The popularity of renttherunway or bagzilla shows they are fnding the goods then renting them. That is part of showrooming.
I’m sure the carriers have the stats on showrooming but doubt they will ever be shared as they make money on those apps working. The fact is showrooming – customers using a retailer’s overhead to meet their own need to see, touch and explore a product – is on the rise. Just ask those in the stores – not in the silos.
Amen! Finally another voice in the darkness.
The reality is that shoppers have always done price comparisons on big ticket items. Nothing new there. Showrooming has become a great excuse for a bad quarter. I just don’t buy it.
I believe showrooming is real. Consumers want to use their mobile devices to shop, but retailers are not ready to offer mobile-based shopping solutions.
So, the empty space between consumers wanting to use their mobile devices and retailers not up to speed to offer mobile services accomodates the “showrooming” effect.
Retailers cannot ignore mobile solutions any more than they could ignore the internet like some retailers tried to do in the 1990s.
Showrooming for product information, showrooming for better price and showrooming for product availability seem to be the normal activities of those shoppers who showroom. While the numbers are very low, they can increase as more retailers offer free WiFi in their stores for use in mobile self checkout and or to communicate with store staff via their phones. I believe we will see showrooming being a real threat to certain segments of retail. I do not think someone is going to leave a supermarket because an item is 5 cents cheaper down the street. But saving $100 on a TV, maybe. However, it will still be a relatively small number and retailers will learn to compete as we always have learned to compete with all the disruptive forces against the selling of goods from their brick and mortar locations.
I think it’s totally overblown. Price comping via the web has been going on for years already, and no one’s started on fire (other than Best Buy). It’s been pretty simple to see who has the best price for oh, a couple of decades now. And besides, as a retailer, if you’re carrying commodity goods whose price can be topped by anyone, you’ve always been in a poor position — even before showrooming or internet comping so, what’s new??
FWIW, of all the people I know, many of them fanatic shoppers, retailers, retail consultants and of course, my wired millennial kids . . .NO ONE show rooms, ever. It’s not even a conversation. So, from my perspective, it would be good to see some data on who these showroomers are, how many of them there are and what they’re showrooming. I mean, are we talking to ourselves?
I wrote a blog post last week based on Joel’s work. In it, I noted my own tendency to “reverse showroom” — to narrow my search online so that I can go buy at retail. It drew a tremendous number of responses from people who see reverse showrooming as a larger part of their lives than showrooming.
So overblown? Absolutely. Smart retailers who integrate their channels will far outperform Amazon, or other online retailers in all but a select range of categories (like books).
Sure they are overblown! You can’t attract readers or sell consulting services unless you hype disaster. A person with great expertise in an area can always take advantage of those with little or no knowledge and especially those who won’t go to the trouble to gain any knowledge.
Showrooming will increase due to the expansion of the smartphone. However, this should give the retailer an opportunity to make sales rather than lose them. An educated, astute sales associate can sell a prospective customer who is showrooming if the associate is aware of what is going on and the retailer has a policy that deals with this phenomenon, instead of trying to block it. Trying to block a cell phone signal will eventually cost a retailer more business than it saves.
I have a son in law who was in the market for a camera and saw that Sears would match internet pricing. He went to Sears rather than Amazon. I don’t know if this policy is still in force at Sears, but every retailer should consider this policy on some items.
Now do we think market research is often flawed? Well much of what we see as “market research” is often conducted to support a position to influence behavior. These “white papers” are not research but sales tools designed to elicit a response. What in the world do you think political pollsters do in the off season? They sell their systems of supplying the “answer you want” to anyone willing to pay the price. Research is often a justification tool. NO ONE should ever accept any research without first looking at the research tools.
Showrooming will have an impact, but it is just another consumer change retailers need to adjust to in the overall omnichannel customer experience. What showrooming does is expose to retailers that differentiated pricing for undifferentiated products are difficult to sustain. Pricing transparency is very easy with mobile devices, so you need to add services/availability to differentiate your offering while they are in the store.
Smart consumers use whatever tools are available to them. They always have and they always will.
One’s sense of how important showrooming is — or isn’t — is a direct reflection on one’s view of how important pricing is. Here’s a real world example. I regularly patronize Book Beat, a wonderful, eccentric, iconic independent bookstore in the Metro Detroit area. I also shop Amazon. In about 100 percent of the cases I could buy any given book for less on Amazon than I could at Book Beat, but if I did and my behavior was mirrored by enough Book Beaters, the store would close. It’s more important to me to have Book Beat stay open than it is to save an additional 15 percent, or whatever.
There are dozens of examples of this in almost all our lives — paying more for a loaf of bread at a small bakery; over-tipping a favorite waiter or waitress; patronizing a restaurant where the prices may be higher than Taco Bell, etc., etc.
I think it’s clear that showrooming is a growing phenomenon and will continue to grow over time as price comparison tools get more and more convenient and sophisticated. As to how large it is today — that’s anyone’s guess and therefore the subject of endless, often mindless debate.
But that really misses the point.
There’s more than price involved in every purchase. And, to directly answer the question, that’s one of the major flaws in market research. An individual study finds what it finds, but it is, at best, only one data point so it can never tell the entire story. Most marketing studies aren’t, “wrong,” i.e., they don’t misreport findings. But all of them are limited and subject to a thousand problems from survey bias, to response rate, to issues of language and interpretation, and on and on and on.
Human beings are complex and their shopping patterns are a direct reflection of that complexity. Rather than playing endless rounds of, “My study is bigger than your study,” maybe we ought to take some time to think about how people live before we interpret how they fill out a survey form. Here’s an interesting idea — we could look at how we shop as individuals for starters.
Me … I’ve been inspired … I’m going to Book Beat. Later.
Yes, of course showrooming is overblown. But the act of price/feature comparison does and will continue to happen within a store’s walls. Smart devices have given the consumer this ability so retailers need to account for it by knowing competitive pricing, promotions and acting like one of the great retailers.
This should be easier in today’s market as factors such as high travel costs and the scarcity of free time should prompt consumers to buy once in a store.
Here’s an actual recounting of how my thought processes went on a recent trip to a store. “Wow, this product is $10 cheaper if I have it delivered in 3 days (while standing right in front of it) or if I take 40 minutes (my free time is worth more) to drive to a different location (my 8 cylinders will eat the price difference) and purchase it (if it truly is in stock) there. Heck, I’ll buy it here.”
Consumers who eat healthy diets, who exercise regularly, and who showroom are in a well-publicized minority. Showrooming is definitely a threat, however, it is certainly not taking significant share away from brick-and-mortar stores today. Will it increase? Perhaps. In the mean time, brick stores need to develop more compelling reasons for shoppers to shop their stores. And service is the final frontier of that differentiation… that online stores cannot duplicate: The Human Touch.
Market research has always had inherent prejudice in its approach. That’s why unemotional technologies, such as consumer sentiment analysis tools help remove the prejudice in the research.
David Dorf, Sr. echoes a finding I have observed in research done on the value of paper-based communication (yes – boring old mail!) vs. electronic messaging when he shared:
“…already done my research at home.”
The PLANNING side of the shopping occasion is viewed and approached very differently for the MAJORITY of shoppers and so the showroom influence exists — is growing — but is not catalysmic (yet). Pay attention to it, be aware of it, have ready responses to it, but don’t assume the sky is falling.
Great comments everyone. The larger issue, as Kahneman pointed out, is that people are bad at math. That includes marketing teams! Yesterday we were wrong about TV, today it’s showrooming. Tomorrow it will be some other shiny object where we alarm marketers with an incidence number when the share impact is tiny, or as the French would say, des poussieres (amounts to specks of dust).
I’ve always looked at research just like a bikini…what you see is very revealing, but what the bikini hides is vital. We conducted a research report into what people would listen to if they had the chance. The research firm worded the question, “If a radio station played show tunes, would you ever listen to it?” Then they asked for jazz, big band songs, along with the normal variety of formats. OF COURSE people said they “might” listen to show tunes, etc., so do you program a radio station with show tunes? The same is happening with retail research. Good for you, Joel.
Whether “showrooming” explodes or not only heightens the fact that successful retailers have always offered something different, relevant, and valuable to their customers beyond price and selection. If you’re expecting to win on those two attributes, start preparing for bankruptcy now.
Showrooming is overblown — it is just price comparison and consumers have done it forever.
Part of the shopping experience is feeling like you got a good deal (or better yet, not ripped off) if the TV/PC etc. is within 5% OR $20 of another retailer or website. Am I going to leave the store, or buy it and feel good?
Are car dealers obsolete and all cars bought online now? It’s called the showroom.
The phenomena of showrooming and the buzz that surrounds it collectively represent an opportunity for retailers to take charge of technology rather than be victimized by it.
I like the logical and fact based argument set forth by Joel Rubinson, and agree that showrooming will not spell the death of brick and mortar retail. At the same time, rather than seeking to dismiss the topic entirely, I would hope retail executives would embrace learnings from the discussion.
While this and other topics can be misunderstood, there are key elements that should be taken into account in order to effect continuous improvements in business. In the case of showrooming, retailers which examine root cause behaviors behind the hype can make appropriate enhancements to their store and merchandising operations.
I’d rather use real behavioral data than market research to measure this (and although I haven’t tried to do this project specifically, I suspect it can be done).
This is also not an indictment of Marketing Research. I would suggest applying this kind of research in a second phase of analysis to known behavioral groups to add color to the insight if needed.
If I was a retailer concerned about this, I’d want to know it specifically for my business and my individual customers, not aggregate US or industry statistics.
We’re in the digital age, but not using the digital data to measure it!
Showrooming is little more than a “the sky is falling” excuse for dropping sales. Brick & mortar retailers have a lot to offer, but they insist on competing on price, which is like wearing a chum suit off the Florida coast. Nothing like setting yourself up for attack.
In addition, asking people what they do and why they do it is the single worst way to get good information. We aren’t objective about our time, our motivations, or our emotions.
If you want to see an intriguing view of TV’s, the media’s and materialism’s affect on our culture, view the film #ReGENERATION. How do we as retailers and consultants contribute to all this?
To add to the research debate, studies that use averages are biased by sample skews. Said another way, it’s more important to understand the behavior of retail categories or consumer types than it is to understand the average.
Specifically, we should care more about the behavior of smartphone users than all shoppers. We should care more about the behavior of millenials or digital natives than all shoppers.
Similarly, we should care more about the showrooming problems of hardline retailers, particularly electronics. This reminds me of how categories feeling the pinch from private label in the mid-90s (such as paper products) served as cautionary tales for categories that would realize the pain later (such as cereal).
In other words, for hardlines retailers frequented by Millennials, it’s a lot more productive to counter showrooming than if you’re average retailer frequented by average shoppers (if that even exists). Pay attention to former’s successes and failures and get prepared.