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How Amazon Benefits From Showrooming

The rise of smartphones is influencing how people shop. Consumers no longer just go to stores to buy an item and take it home.

One third of all US adult shoppers take out their phones to check prices on items they seen in the store to see if they can find it cheaper online.

This technique is called “showrooming,” and it’s on the rise. In fact, according to a new report from marketing company Pargo, comparison shopping on a smartphone while in-store is up 400% over last year.

 

This new behavior is helping Amazon. According to Pargo’s research, “Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study,” a price difference as little as $5 can make shoppers order from Amazon instead of purchasing that item in the store. It’s no wonder that Barnes & Noble has had so much trouble. Readers can easily browse new books on their big tables and then pay less to order their reading lists on Amazon, who isn’t paying for the showroom floor.

According to Pargo’s study, 59% of households with annual incomes $200,000+ make purchases from their phones while they are in a store weekly. In addition, half of all shoppers will buy a similar $500+ item at Amazon if it’s got a 5% discount even if it’s not the same exact match. Interestingly, Amazon is the go to showrooming app. And not only is it the No. 1 app of choice for shoppers that “showroom,” it is 2x more popular than the No. 2 choice, Google. (Via GigaOm).

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