Shoppers’ smartphone use not all bad for brick-and-mortar stores, study says

Seong Joon Cho/BLOOMBERG - A new study shows shoppers who user their phones to price-match in stores don’t always buy online. Above, a visitor tries out the Samsung Electronics Co. Galaxy S III smartphone at the company's flagship store in Seoul, South Korea, on Thursday, July 26, 2012.

Online sales are rising at a brisk pace, but brick-and-mortar retailers’ efforts to keep even the most Web-savvy shoppers in stores is having some early success, according to a Pew Internet and American Life Project report released Thursday.

The report focused on shoppers who use their cellphones in stores to check prices, look at reviews and consult others about their purchases. Retailers have been fighting to keep those consumers from browsing the aisles and then buying discounted products online later, known as “showrooming.”

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More consumers, 58 percent, consulted their phones during the 2012 holiday season, compared with 52 percent in 2011. Young shoppers, wealthy shoppers and smartphone owners were the most likely to leverage their cellphones while shopping.

About 12 percent of those who used their phones to look for cheaper prices opted to buy the products online, about the same percentage as did in 2011, according to the report.

But the report contained some good news for retailers: Almost half of the people who comparison shopped with their phones, 46 percent, still ended up at the cash register, an 11-point increase from 2011.

That likely reflects retailers’ efforts to combat the growing appeal of online sales. Many major retailers now match online prices. Target puts online reviews on shelves next to electronics. In November, Best Buy’s new chief executive, Hubert Joly, told employees to step up because “once customers are in our stores, they’re ours to lose.”

Many store owners feel that online retailers have an unfair advantage because some offer the same products to consumers without charging state sales tax, said National Retail Federation tax counsel Rachelle Bernstein. The NRF and others back federal legislation, expected to be reintroduced this year, that would require online retailers to collect local sales taxes based on customers’ location.

“It’s often enough of a price differential to make the difference in the sale,” Bernstein said.

Best Buy invested in employee training to supplant online review searches and expanded an online price-match program to combat the trend, said company spokeswoman Amy von Walter. She said the company has, so far, seen “positive results” in sales and customer experience as a result but declined to provide specifics ahead of the company’s February earnings release.

While Pew’s data indicate smartphone use isn’t quite a nail in the coffin for physical retailers, online and mobile sales are outpacing overall retail sales. Online holiday sales hit a record high in 2012, up 14 percent from last year, according to data from ComScore.

The National Retail Federation estimates online retail sales will grow between 9 and 12 percent over last year to generate at least $230 billion in sales. Overall retail sales are expected to grow 3.4 percent in 2013, slower than last year, the group said.

 
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