Webrooming Signals Online Retail Decline

Online shopping was the very platform that brick-and-mortar retailers feared would take away sales in physical stores, but there’s a new potential trend that’s bringing web shoppers back into stores.

Instead of using the web to drive traffic out of stores, research from a University of Maryland business professor shows that the tactic called webrooming — the new showbrooming — is bringing the savvy online shopper into stores after the shopper compares products and rates online. This consumer tactic will likely increase competition in the eCommerce space and has the potential to increase foot traffic in stores again.

“In recent years, we’ve heard a lot about showrooming shifting the sales of big ticket items from offline to online stores. Such items, especially electronics, remain popular with holiday shoppers, so this trend continues. Consequently offline retailers selling branded, standard products will continue to see sales volumes being eaten away by cheaper online stores,” P.K. Kannan, a professor of marketing science at the UMD, wrote in a university news release.

Now his research suggests that webrooming may soon be the new norm: “But look for showrooming’s effect to decrease in coming years as webrooming increases, especially for holiday shopping. Offline stores will benefit from a likely sales volume shift from online stores. The reason is two-fold.  The price differential between online and offline purchases – significantly for standard, branded products – will decrease as taxes are levied on online purchases on top of shipping costs that consumers bear. This is further compounded by the tendency for holiday-season consumers to be short of time, plan less, and want immediate possession of the items.”

The marketing processor said this concept has eCommerce giant Amazon changing its own strategy as the concept of webrooming sparked the company to open offline stores in New York and San Francisco during the holiday season. Bringing people back into stores gives consumers confidence in quality of products since they can inspect themselves, Kennan said, adding that pricing that varies online makes consumers doubt quality.

“The pendulum is swinging back, at least for now, to the offline retailers. Consequently, webrooming should be a real concern for online retailers especially during the holiday season,” Kennan said.