showrooming in canada: the price of keeping buyers in-store
DESCRIPTION
GroupM Next teamed up with our colleagues at Catalyst Canada, the leading search marketing innovator, to expand our research efforts and gain a deeper understanding of consumer behavior in the Canadian marketplace. This study examined consumer behavior in Canada as it relates to showrooming and revealed that a significant number of shoppers – 37% -- will leave a brick-and-mortar store and make a purchase online when the online price is just 5% lower than the in-store price. When the discount increases to 20%, lower than what’s offered at retail, the number of shoppers who leave and complete the purchase online nearly doubles to 73%. Our whitepaper about this research details behaviors and factors that influence shoppers who price compare online while shopping in-store, and explores: -- The combination of variables that factor into a consumer’s decision to purchase online rather than in-store -- Demographic and behavioral traits that help identify shoppers who are likely to engage in showrooming – and how brands can capture this influential customer -- Differences in behavior between consumers in the United States and CanadaTRANSCRIPT
Showrooming in Canada: The Price of Keeping
Buyers in Store
Jeff Lancaster, CEOCatalyst Canada
catalyst.ca
@jefflancaster
Study: Showrooming in Canada
Download white paper now at: catalyst.ca/showrooming
+
46%
54%
We Asked 2,000 People About The Winter Boots
13% for 2.5, 23% for 5, 48% shoppers would leave for 10% discount
How Big is Showrooming?
Impact Online Discounts Have On In-Store Purchases (Canada)
0% 5% 10% 15% 20%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% Discount
% S
hop
pers
Sta
yin
g I
n S
tore
Canada
US
Source: Retail Showrooming in Canada: Winning the Consumer and the Price of Keeping Buyers In-Store; Catalyst/GroupM Next, 2013
Immediacy
The Value of Discount Matters Too
$15 discount: majority of Canadians will leave and buy online$5 discount: US consumers will leave and buy online
What Consumers Consider
1. Size of the Online Discount
2. Familiarity with the online retailer
3. Shipping
SAVE $25
Shipping
• When we looked at 2 week shipping option (vs. 1 week) - 5% more consumers would simply purchase in store
Other Factors 1. Different language markets
2. Whether consumers would be “in-market” for the product or not
3. Presence of Children
4. Use of Public Transportation
The Retailer Response
Responses to Showrooming
1. Pricing2. Which Shoppers to target3. Loyalty4. Behaviours5. In-store exclusives6. Search7. Mobile Apps8. Geofencing9. Control
Pricing
In Canada staying within 10% of the price – gives you a fighting chance
- Can your pricing become more dynamic to reflect market?
Price Matching
Identifying Your Targets
Who Are the 10% to Win Over?- Created statistical model to rank shoppers from likely to stay to
unlikely to stay
The 10% to win over are:- Slightly more likely to be female- Average age = 58 years old- Median income = $50,000 annually- Half have some college or higher education.
Casual online buyers:- 38% buy only once per year- 53% buy online once per month- 5% once per week- 4% more than once per week
Loyalty programs
What In-Store Behaviors To Target?
When a shopper…
- Compares alternatives + - reads reviews on mobile phone
= Less likely to stay in-store
- Talking with an associate make them more likely to buy in-store (12.5% more likely)
In-Store exclusives
Where are you on Mobile Search?
Google’s new Enhanced Campaigns
Own search shelf for key products
• Reviews• Best price• Compare• Cheap
Mobile app
Geofencing
Can you control the showroom?
Next Steps for Retailers
- Understand your customers
- Develop a mechanism to understand the online marketplace
- Extend the conversation beyond price- Loyalty, search, apps, behaviour, control
Thank You
catalyst.ca@Catalyst_CA
Download white paper today at: catalyst.ca/showrooming