White Paper Showrooming Uncovers a New World of Retail Opportunities The Rise of High-Tech Shopping Figure 3 Retailers want to keep consumers in their stores, and consumers are interested in getting the best possible price. Enter showrooming: the practice of consumers using their mobile devices within a physical store to search for the most competitive purchase price. 20% of consumers currently participate in showrooming, and the practice is expected to grow substantially. In October 2012, Aprimo and an independent consumer research firm conducted a research study of 2,025 US shoppers over the age of 18. The purpose? Determining how many consumers participated in showrooming, how many planned to begin or to continue the practice in the future, and what that means for retailers. Consumer electronics (e.g. digital cameras, TVs) Grocery (e.g. food, diapers, grooming) Apparel, accessories, footwear Housewares/small appliances (e.g. vacuum cleaners, ...) 39% 37% 33% 31% 30% Movie/event tickets 27% Video games A Look at the Numbers Home improvement (e.g. lumber, tools) Sporting goods (e.g. equipment) Music/videos (including digital) Furniture (including mattresses) 23% 20% 19% 18% 17% Toys Large appliances (e.g. dishwashers) 14% 14% 25% Office products Cars or auto parts (including tires) 25% Baby care (e.g. strollers, feeding bottles) Computers (including tablets and peripherals) 24% Other Books (including eBooks) Today’s customers are in control of their shopping experience, and they will use whatever tool is available to search for the most competitive offer (see Figure 1). And consumers with Smartphones are even more likely to research product prices while shopping. Figure 4 Consumers research prices on their mobile devices for many categories Consumers who research prices on mobile devices find it easy It is easy to research prices online in a physical store 47% I type the name of the product in a search engine when researching 40% I often research prices online when I am shopping in a physical store 38% I find it easiest to scan a barcode or other image to compare prices 33% The internet connectivity in stores is often bad so I cannot research prices as much as I’d like to 11% 9% It is difficult to research prices online in a physical store 16% 6% In fact, 96% of Smartphone users say they intend to begin – or continue – using their mobile devices to research and compare prices in the future (see Figure 2). Figure 5 Consumers Are in Control No matter what they’re shopping for, consumers are in control of the brand experience. From electronics to infant care products, consumers conduct price comparison research on their mobile devices across a wide and diverse range of categories (see Figure 3). I purchased the product/brand I was researching in the store where I was shopping Higher than in a store Our research study indicates that in-store shoppers are just as likely to showroom lower price point items (e.g., groceries, books, and office supplies) as they are to showroom high price point items (e.g., cars, computers, and furniture). 8% Of those showroomers who decided – based on in-store research – to make a purchase elsewhere, they found the determinant research was easy (see Figure 4), and they were typically successful finding lower prices elsewhere (see Figure 5). Lower than in a store 55% Same as in the store 37% 18% I purchased the product/brand I was researching later at another store 18% I purchased the product/brand online from another website 15% 9% Price matches and personalized offers are opportunities TO retain shoppers A price match for the item 57% A personalized coupon to purchase at that time in the store 36% Loyalty points for purchasing from the retailer 30% Better customer service in the store The opportunity to have the item shipped to my home directly A more generous return policy 29% 23% 19% Consumers with smartphones often research prices while shopping Population with smartphones Shoppers (within last 6 months) Price shoppers Not sure 1% Non-buyers Other Smartphone owners 54% 46% (including no-device consumers) 15% Seize the Opportunities, Retailers! Non“Showroomers” “Showroomers” Recent buyers 47% 52% Many consumers say they will use their phones more to research prices in the future Future “showrooming” intention Less 4% Intent among men 18-34 Less 4% More 59% Less 2% 31% More About the same About the same Intent among women 18-34 More 37% 49% So what does this mean for retailers? In short, opportunities abound (see Figure 6). As our digital landscape expands, so does the opportunity to let each individual customer control his or her retail experience. Retailers must shift their focus from product-centric to customer-centric strategies by: 85% Figure 2 40% I purchased the product/brand online from the website of the retailer where I was shopping I did not purchase the product Figure 1 Figure 6 Switching retailers or channels is common after researching prices on mobile devices 47% About the same >> >> >> >> Connecting all data to better understand their customers Analyzing shopper behavior both online and offline Optimizing customer relationships at every touchpoint Delivering relevant, timely, and personalized messaging With a sophisticated Integrated Marketing Management (IMM) solution that supports a customer-centric experience, the risk of consumer flight based exclusively on price-matching is greatly mitigated. Visit www.aprimo.com/retail to learn more. Many consumers who indicated they didn’t currently showroom were not opposed to the practice. Instead, they either didn’t think about their devices being used for this purpose or didn’t realize this type of activity was possible. 67% NOTE: This survey was conducted online within the United States by Harris Interactive on behalf of Aprimo from October 16-18, 2012 among 2,025 adults, ages 18 and older. This online survey is not based on a probability sample and, therefore, no estimate of theoretical sampling error can be calculated. The growing trend of showrooming One-Third of customers leave and purchase from a competitor. Tips for today’s retailers: Engage Consumers A high percentage of consumers welcome price matches and personalized offers like these: 57 % 23 % 29 % 30 % 36 % Price Matching Personalized coupon to purchase Loyalty points from the retailer Better customer service in the store Item shipped to my home directly Respondents were able to select more than one option. The survey, fielded by Harris Interactive on behalf of Aprimo, surveyed 2,025 online adults in the U.S. in October 2012. One in five consumers are now “showrooming” — the practice of visiting Challenges Challenges with today’s consumers Over 50 % with a smartphone research prices online while in a store 1 in 3 who research prices leave & purchase from a competitor 96 % of smartphone owners say they plan to"showroom" in the future • 18% Purchased the product they were researching at another store • 15% Purchased the product they were researching from a different website retail stores to try products, but then checking a mobile device for the best price online. November 2012 research by Aprimo®, a Teradata company, in collaboration with Forrester Research. Customer Centric Marketing Understand your customers 1by connecting all your data Analyze shopping behavior 2online & offline Optimize customer relationships 3at every touchpoint relevant, timely & personalized messaging 4Deliver www.aprimo.com About Aprimo organization, letting companies balance creativity with a data-driven approach and simplify the complexity of a rapidly changing marketing environment. Aprimo is a leading provider of software and services that advance the productivity and performance of marketing organizations. We enable marketers to engage, lead and perform by empowering conversations on new engagement channels, enhancing internal collaboration, and improving marketing performance and accountability. 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