View from Academia - What’s Not Shown in a Showroom is Making a Big Difference

By Mark Ferguson (University of South Carolina) Michael Galbreth (University of Tennessee), Guangzhi Shang (Florida State University)

Opening up showrooms have recently become a major trend for many online retailers, U.S. and Worldwide. For example, Amazon operates a flagship showroom – the Sphere – in its headquarter city, Seattle. Its London showroom – Amazon Go – is also under development. In Beijing, Amazon implants pop-up showrooms of smaller scale into major shopping malls. Chinese online retail giants such as JD.com and Tmall.com follow suit with technology-themed showrooms throughout big cities of China. The appeal of showrooms for online retailers is straightforward to see: Browsing webpages lacks touch and feel, which is essential for many product categories such as apparel, electronics, and furniture. Having access to a showroom helps consumers reduce uncertainty and in turn increase/decrease intent to purchase/return. However, showrooms have limited capacity – especially true for pop-up stores, yet retailers in need of a showroom such as Amazon usually carry a large number of SKUs. As a result, only a selected few items can make it into the showroom. After all, not everyone is Warby Parker – the online glasses retailer who typically displays its entire collection in the showroom. While it is obvious that the SKUs on display can benefit from showrooming, what’s often overlooked are those not on display. Will showrooming also make an impact on those “hidden” products?

A recent study by Professors Zhang (U of Electronic Science and Technology of China), Li (Xi’an Jiaotong U), Cheng (Hong Kong Polytechnic U), and Shum (City U of Hong Kong) answers exactly this question. They propose a novel concept termed inter-product showrooming: “the behavior of inspecting one product offline but buying a different or related product online”. Imagine that an accent chair in a Wayfair showroom caught your eyes. You subsequently search for this accent chair on Wayfair.com and end up buying an accent chair of similar style yet from a different manufacturer. Such inter-product showrooming benefits indirectly the manufacturer of products that are not on display in the showroom, yet are similar in style/color/material. According to a consumer survey conducted by the authors, over 50% respondents report one or two times of inter-product showrooming in a 12-month period. Women’s apparel, consumer electronics, and furniture are among the categories most frequently encountered inter-product showrooming. Further details from this study can be found below:

Zhang, T., Li, G., Cheng, T.C.E. and Shum, S. (2020), Consumer Inter‐Product Showrooming and Information Service Provision in an Omni‐Channel Supply Chain. Decision Sciences. doi:10.1111/deci.12415

1 This recurring series provides plain-English summaries of leading academic research in the area of consumer returns. It is co-produced by Mark Ferguson (Univ. of South Carolina), Michael Galbreth (Univ. of Tennessee), and Guangzhi Shang (Florida State Univ.).