The phenomenon of showrooming - in which consumers armed with smartphones show up at a store to check out a product, then buy the same item for lower price online - has been a real curse for major American retailers.
recent study by Deloitte Digital estimated that some $159 billion in U.S. store sales were impacted by the showrooming trend. That’s about 5 percent of total 2012 sales. By 2016, that figure could hit $689 billion, figures Deloitte.
Which major retailers are most vulnerable? Market research firm
conducted a survey and developed a list of retailers most impacted by showrooming and Amazon
The study found that consumers who showroom, then purchase on Amazon, are 20% more likely to visit Best Buy
and 15% more likely to visit Target
than average, but Bed Bath & Beyond
and Toys ‘R’ Us all face greater risk.
Retailers are starting to fight back. Best Buy now matches the lowest price found at online retailers.
at the Wall Street Journal has an illuminating story about how Best Buy, which just signed an ambitious partnership with Samsung, has rolled back the tide off showrooming. Left for dead not that long ago, the retailer's stock is also on fire this year.
BBY data by YCharts
Finally, Statista and the
American Association of Advertising Agencies
put together this infographic that illustrates the showrooming trend in an interesting way:
The investments discussed are held in client accounts as of March 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.
Showrooming: Retailers' dreaded profit destroyer
appeared first on