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Amazon Winning Battle Over Showroomers

Amazon $5 Advantage

A new study by parago claims Amazon is the preferred way U.S. consumers compare prices on their smartphone while in a physical store. Such price-checking is often referred to as showrooming, which is when customers look in-stores but buy online. Interestingly, the study says showroomers chose Amazon twice as often as Google for price comparisons.

Showrooming is occurring substantially across all income levels and retail categories, even those often assumed immune from it, such as auto parts. Additionally, a price difference of just $5 in many cases can sway the purchase decision to Amazon. Price is the most important mobile research factor, but customer reviews also rank high.

Parago’s study finds 58% of smartphone owners regularly showroom and buy e-tailer products while in brick-and-mortar stores from their smartphones or go home and buy them online. Consumers are even choosing competitors’ products (or similar items) on their smartphones while in-store if the price is significantly cheaper.

“Shopping behavior has fundamentally changed. The combination of growing smartphone use, consumers’ determination to find the lowest price and the ability to make purchases on smartphones while in store is resulting in brick and mortar retailers losing buyers to savvy e-tailers like Amazon in unprecedented numbers,” explained Rodney Mason, CMO of parago.

This is not good news for traditional store retailers, who must now find innovative techniques to lure customers into a purchase decision. One such strategy is to offer dynamic price match rebates, which can give an early advantage to retailers that offer it. Permanent price-matching in-stores was also revealed to be beneficial to physical store sellers in a recent Harris Poll.

Online Price Match Guarantee to beat Amazon

The full report can downloaded here: Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study (PDF)

The shopper survey was conducted in June 2013 via independent online delivery. More than 1,000 US smartphone owners responded to a survey that explored their showrooming and mobile and online shopping habits, as well as the motivating factors that lead to these behaviors.

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