Webrooming: online opportunities for offline retail

In its 2014 update on cross channel retail, ABN AMRO bank describes the influence of the online channel on offline shopping (article in Dutch). The most important conclusion: there are a lot of opportunities for physical retailers who embrace a cross channel strategy.

In 2011 about 35% of Dutch consumers combined offline and online sales, according to the questionnaire held. In 2014 this is expected to increase to almost half and in 2020 even 64% is expected to do cross channel purchases.

In this context it is important to understand what ABN AMRO means with cross channel purchasing. Cross channel purchasing is purchasing that happens after visiting both online and offline stores. While many traditional retailers fear that consumers visit physical just for “showrooming” after which they will buy online, it turns out that the opposite (webrooming) is much more popular. Only 3 percent indicates that they use a physical shop before buying online, while 28% searches online and then buys offline, according to the research.

This becomes more clear when looking at the channels used for exploration and for purchasing in the customer journey (table translated from the original publication).

Exploration channel Purchase channel Non-Food purchases 2014
Offline Offline 34%
Online Online 32%
Online Offline 28%
Offline Online 3%
Online – offline Online 2%
Offline – online Offline 2%

Physical shops are becoming better at distinguishing themselves from the online-only shops like Amazon. Purchasing advice, experiencing the product, shopping fun and local availability (stock) are indicated as the most important factors with which physical shops distinguish themselves.

Above that, there are ways to leverage online tools in offline situations. For example, retailers use QR codes or just plain stars next to their products to refer to online reviews. Also shop reviews are recognized as an important way to get people to the physical shop.

“[] There is  [online] growth potential for those physical retailers who are prepared to invest in cross channel and thereby offer customers the opportunity to benefit from the best of both worlds”, according to Chris Meijers, Sector Banker Retail of ABN AMRO.

You could go as far as conclude that online-only shops are getting at a disadvantage here.

Jeff Bezos, founder and CEO of Amazon puts it like this: “There are two ways to extend a business. Take inventory of what you’re good at and extend out from your skills. Or determine what your customers need and work backward, even if it requires learning new skills.”

I guess he meant that in a different context.