Showrooming, Mobile Shoppers and the Changing Face of Retail (July 2013)

By Joseph DeSetto, Emerging Payments Blogger

There was a time, not long ago, when shopping was one activity and using a computer or a phone was entirely another. Eventually PCs users, under the spell of e-commerce firms like Amazon, started to hear a nagging voice in their heads when they were in a store telling them they could buy it cheaper online. With the rise of smartphones though, this practice of examining products only to actually buy them online—known as showrooming—is now instantaneous, ever present and within the technical ability of even novice cell phone users.

But is mobile showrooming simply a negative trend toward the eventual, unavoidable end of traditional retail, or a signal that retail customers are now so tied to these devices that entirely new ways of engaging them are required to survive?

Every customer now carries the Internet in his pocket. This is both a threat and an opportunity. The threat is obvious—price comparisons that allow customers to shop at Walmart while standing in Target, or shop at the car dealership down the road while in the showroom of another. But the opportunity in mobile is to take this same connectedness and make it an advantage.

One such example could be called reverse showrooming—driving customers to the store by selling to them on their mobile device. The prime battlefield for this is currently Instagram, an image- and video-sharing mobile application acquired by Facebook last year, and Vine, Twitter’s short video app competitor. For the lucrative and important teen demographic especially, shopping doesn’t start at the mall or even in a magazine. It starts at the virtual corner of Instagram and Vine.

Instagram users especially have said in recent studies that the vast majority use the service for “shopping inspiration”—they are looking for something worth getting off the couch to go buy. The mobile app and its connected community become an essential part of the brand story. The modern version of finding a rare, unique product on a remote vacation island that‘s fun to talk about socially is the scroll of an Instagram feed. The act of sharing these products with their community, and what it says about the buyer, is as important as the product itself. With the mobile-driven brand story and built-in approval of the online community, the product is not only price-comparison exempt, within reason, but likely to be positively shared to the social networks before the user even leaves the store.

This shift is one of several that indicate that mobile’s impact may be understated. For all the actual transactions on mobile devices, there are still many more that are either driven by mobile to brick-and-mortar retail, or showroomed from the brick-and-mortar store to a mobile or traditional online store. Understanding mobile user behaviors and the role these devices play throughout the purchase cycle may be the next great differentiator for retailers.

Joseph DeSetto is Paybefore’s emerging payments blogger and program manager of the Mobile Development Bachelor of Science degree at Full Sail University. He is the author of The Business of Design and previously served as chief technology officer for two mobile startups. If you’d like to comment on this blog post, please join the conversation on our Paybefore LinkedIn Group.

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