Showrooming, webrooming, and operational strategies for competitiveness
Production and Operations Management · 2022 · Volume 31 · Issue 8
Abstract
Show/webroomingrefers to a consumer inspecting a product at a brick-and-mortar (BM)/online retailer before purchasing it from a competing online/BM retailer. Despite retailers adopting price-matching and free-shipping policies, show/webrooming remains prevalent. We model different product value information that consumers can learn by visiting a BM retailer and researching an online retailer, and studying consumers' show/webrooming behavior in a unified model. We confirm that consumers can engage in show/webrooming for informational reasons, but webrooming may also be driven by a noninformational reason. We find that show/webrooming may, respectively, benefit BM and online retailers; in particular, there exist win-win-win outcomes where both retailers and the consumers benefit from show/webrooming. We propose in-store research assistance for BM retailers and free sampling for online retailers and show that these operational strategies may improve the retailers' competitiveness in the presence of show/webrooming. Our results are found to be robust in several model extensions.
Keywords
decision tree, free sampling, in-store research assistance, reverse showrooming
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