showrooming

Consumers use phones as weapons in hunt for bargains

Jan. 30, 2012 at 4:36 PM ET

Santa was no match for tech-savvy shoppers during the holiday season. 

When it came to finding the best products and the best prices, more than half of consumers came armed with their cell phones to help them make purchasing decisions. And just as traditional brick-and-mortar retailers feared, many of those shoppers decided not to buy merchandise from stores they visited thanks to information they got via mobile phone comparison shopping. 

Those findings come from a study released Monday by the Pew Research Center’s Internet & American Life Project, which found: 

  • 38 percent of cell owners used their phone to call a friend while they were in a store for advice about a purchase they were considering making.
  • 24 percent of cell owners used their phone to look up reviews of a product online while they were in a store.
  • 25 percent of adult cell owners used their phones to look up the price of a product online while they were in a store, to see if they could get a better price somewhere else. 

“Consumers are feeling like they have a leg up on retailers,” said Esther Swilley, assistant professor of marketing at Kansas State University, about the increasing use of mobile devices to bargain hunt. “They can get price quotes quickly, and they now realize, ‘I can do better than what you’ve got here.’ ” 

Not surprisingly, the under-50 crowd was more likely to use mobile devices for online product reviews, and urban and suburban cell phone owners were about twice as likely as rural users to have recently used their phones for product analysis. 

Minority mobile users were more apt to look up online reviews than white cell phone owners; and college-educated shoppers were more likely to dial for deals than those who did not attend college. 

Retailers who are worried about consumers’ new-found independence, she added, are going to have a hard time curbing these cell-phone price crusaders. 

Target recently moved to try and derail mobile deal seekers by asking some manufacturers to create Target-exclusive items that would make it harder to comparison shop. The retailer, along with many other merchants who rely heavily on in-store sales, don’t much like the growing habit of “showrooming,” an industry term for shoppers who use stores as a place to check out items and then buy products online at lower prices. 

Such fears, it turns out, are warranted, according to the Pew study. 

Researched asked respondents what actions they took after using their phones in stores to look up prices, and 37 percent said they decided not to buy the product at all. 

In addition: 

  • 35 percent purchased the product at that store. 
  • 19 percent purchased the product online. 
  • 8 percent bought the product at another store. 

That’s just the beginning, said Eric Johnson, management professor and information technology expert at Tuck School of Business at Dartmouth University, who expects mobile devices will become a shopping mainstay. 

Retailers such as Target and Best Buy, he said, have been the most worried about how the technology will undermine sales because of the “petting-zoo phenomenon,” but they’ll have to learn to embrace it given the potential upside. 

Savvy merchants are using mobile technologies to “augment the shopping experience,” he explained, pointing to Wet Seal, the junior apparel chain, as a prime example. 

Wet Seal offers its customers an app that gives them suggestions for ensemble pieces, or accessories, when they scan codes on merchandise in the store. They can buy the products in the store, or go to a virtual shelf online and purchase the color or size they want if it’s not in stock, he said. Mobile users can upload the outfits to Facebook so friends can offer their “likes” or “dislikes” before shoppers buy. 

This type of mobile integration, he said, “is where the real excitement is.” 

Traditional retailers, he continued, “can’t just employ defensive moves to make it difficult to compare, but they have to find substantial ways to connect with the shopper in the shopping experience, and do that with mobile apps.”

Related story:

Target tries to fight off online retailers 

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