Webrooming is a shopping process where the consumer browses for a product online before purchasing it in-store. Webrooming is the reverse of showrooming, where a consumer visits a brick-and-mortar store to inspect the product before purchasing it online for a lower price. Webrooming, therefore, describes the consumer practice of researching products online and then purchasing them from a physical store.
Understanding webrooming
Studies show that webrooming is most common for products such as appliances (58% of all purchases), electronics (54%), and apparel (49%). The practice is mostly utilized by Gen X consumers, who perform detailed product research online before buying, and Millennial consumers, who rely on devices to improve their in-store experience.
What causes webrooming?
Here are some of the key drivers of webrooming:
Shipping cost – some consumers purchase in-store because they want to avoid having to pay for shipping.
Tactile experience – others want to be able to see and touch a product before they commit to purchasing it. Somewhat counterintuitively, the desire for a tactile experience is also a driver of showrooming.
Store availability – according to online publication Small Business Trends, some 42% of consumers check store inventory levels online before visiting a store to avoid wasting a trip. In other words, their primary intention is to purchase in-store.
Product returns – a certain percentage of consumers also want to be able to return products to a physical store. In general, returning a product in-store is considered easier than posting an item back to an online retailer.
Impatience – webrooming also occurs because consumers do not want to order online and be forced to wait for the product to be delivered.
The future of webrooming
Critics of the shift toward eCommerce believe that practices such as showrooming force bricks-and-mortar stores out of business. However, it may be that the retailers who suffer in this environment are those that are caught out by rapidly changing consumer preferences.
To survive in the modern retail industry, businesses must allow consumers to easily switch between online and offline purchases. This means catering to a mixture of showrooming and webrooming across stores, apps, websites, and any other channel a consumer considers when making a purchase decision.
Webrooming seems to have strengthened in the past years. While showrooming, on the other hand, was reported by only 57% of consumers. This data indicates that the future of webrooming – and by extension, physical retail stores – is not as uncertain as some critics propose.
Key takeaways:
Webrooming describes the consumer practice of researching products online and then purchasing them from a physical store.
Webrooming tends to be concentrated on appliances, electronics, and apparel. In general, the practice is caused by avoidance of shipping costs, the desire for a tactile experience, store inventory levels, easier product returns, and impatience.
Some propose that showrooming and eCommerce will make webrooming and bricks-and-mortar stores unviable. However, data indicates that webrooming is more popular and that retailers should incorporate a mixture of both to cater for consumers.
Bundling is a business process where a series of blocks in a value chain are grouped to lock in consumers as the bundler takes advantage of its distributionnetwork to limit competition and gain market shares in adjacent markets. This is a distribution-driven strategy where incumbents take advantage of their leading position.
According to the book, Unlocking The Value Chain, Harvard professor Thales Teixeira identified three waves of disruption (unbundling, disintermediation, and decoupling). Decoupling is the third wave (2006-still ongoing) where companies break apart the customer value chain to deliver part of the value, without bearing the costs to sustain the whole value chain.
Unbundling is a business process where a series of products or blocks inside a value chain are broken down to provide better value by removing the parts of the value chain that are less valuable to consumers and keep those that in a period in time consumers value the most.
As pointed out in the book “Unlocking The Value Chain” by Thales Teixeira, business model disruption has followed three waves: unbundling (1994-99), disintermediation (2000-05), and decoupling (2005-onward). Today what’s disrupting the business world is the wave of decoupling. That consists in breaking the customer value chains by identifying valuable activities that can be performed by the decoupler, which can capture a good chunk of the businessvalue from incumbent companies.
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).
Business modelinnovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.
The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovationmanagementmodel based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable businessmodel. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the businessmodel. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.
In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.” Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.
A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
