Showrooming: Empowering Consumer Electronics Shoppers

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1 Showrooming: Empowering Consumer Electronics Shoppers February 20,

2 Contents Introduction and Topline Summary 3 Research Results 6 Appendix 21 2

3 Introduction and Topline Summary 3

4 Introduction This Showrooming: Empowering Consumer Electronics Shoppers Study focuses on consumer electronics and explores the influence of mobile devices on the shopping process, general shopping behaviors in physical stores/online and showrooming. Ipsos fielded the online survey with 482 consumer electronics shoppers (past 6 months) in February with its HearWatchSay (HWS) community. Quantitative results were supplemented with qualitative input about shopping and showrooming behaviors. HWS is an online community whose members are media forward enthusiasts of movies, TV, technology, gaming. Respondents are Adults in the US. 4

5 Topline Summary Key Insights 86% of consumer electronics shoppers surveyed did their shopping online, while 74% shopped in a physical store. Nearly one third (31%) of consumers used their mobile device for shopping related activities while in a store. Among in-store shoppers, over a quarter of consumers intended to showroom by trying out the products in the store and then buying online. However, more than half of in-store consumer electronics shoppers intended to buy the product in the store. In line with showrooming expected behaviors, close to three-quarters of consumers who went to a store went there to try out a product.. Over 3 in 4 consumers did some form of online research prior to going to a store, while 6 in 10 did so after visiting a store. Shoppers who used their mobile device while in the store were more likely to do online research after their store visit. Whether doing research before, during or after going to the store, the most popular research types done were: checking prices, reading reviews and looking up product features. Over 4 in 10 consumers who ultimately made an online purchase used their mobile device in store for showrooming/shopping related activities. Price is the top driver of consumer electronics purchases online. Convenience and the ability to try/see the products are the top reasons for purchases in the store. Biggest spenders did in-store research on a mobile device. In-store mobile users were much more likely to make unplanned purchases while shopping: 1 in 3 bought something spontaneously in the store, 1 in 4 bought something spontaneously online. On average, mobile device owners and those that use their mobile device while shopping spend more on consumer electronics. (However, this could be due to increased frequency of purchases and not increased spending per occasion). Over a third of shoppers recall seeing ads for consumer electronics they were shopping for. Among these shoppers over 7 in 10 report seeing digital ads. 5

6 Research Results 6

7 Where Did You Shop for Consumer Electronics? 86% of Consumers Shopped Online 3 Out of 4 Shopped in a Physical Store Did You Shop Online? Did You Shop In A Store? 14% 86% 26% 74% Yes No Yes No Q1a. Did you shop ONLINE for the following products? Q1b. Did you go to a physical STORE to shop for any of these products?

8 More Than Half of In-store Consumer Electronics Shoppers Intended to Buy the Product in the Store Over a Quarter Intended to Showroom, by Trying Out the Product in the Store and then Buying Online In Store Intentions I always first go to the store to look at a product and then buy it online (especially off of Amazon). 58% No, I intended to try out the product, but wasn t ready to buy it yet No, I intended to try out the product at the store and then buy it online 25% 27% 23% Yes, I intended to buy the product at the store, but after trying it out I had questions/needed more time Yes, I intended to buy the product at the store Q1c. Did you intend to buy the product when you went into the store?

9 Three-Quarters of In-Store Shoppers Went There to Try Out the Product Nearly Half Visited the Store for Convenience or Price Service Was Not a Key Driver of In-Store Shopping Try It/See It Convenience Why Did You Go To The Store? 46% 74% Even though I may buy the product online I do like to go to the physical store so I can actually see it and perhaps try it Price Selection/Availability 29% 43% It's great to check out phones (new iphones, ipads and other tablets, TVs) and really get to feel and touch and try them in a store Service Shop Experience Saw an Ad/Promotion/Sale Preference/Habit 9% 23% 22% 27% I go to the store for service. If the employees are friendly and knowledgeable and try to help me find the perfect item for me I'll most likely buy it from them. If I have a coupon that I can only use in store and it beats an online price then I will go there for sure to do that. Q2. Thinking about the products you recently shopped for, please tell us why you went to a physical store. Please select all that apply.

10 Over 3 In 4 Consumers Did Some Form Of Online Research Prior To Going To A Store Did You Do Online Research? Yes, on mobile device Yes, on computer No Top Research is Checking Prices, Reading Reviews And Looking Up Product Features Any and all price/product research is done on my computer before I even set foot outside the door! 21% 73% 22% Yes (Net) 78% Checked prices of the product(s) at online retailers Read reviews of the product(s) Looked up product features Checked prices of the product(s) at physical stores Checked in-store availability/stock Asked friends for advice online (social networks, Checked warranties Checked store hours Type of Research Before 16% 15% 14% 33% 59% 80% 79% 76% I am a big comparison shopper and will always check prices and reviews on higher ticket items before going to a store. Total Looked up directions to the store 6% Q3. Still thinking about the products you shopped for in a store, did you do online research BEFORE you entered the store? Q4. What type of online research did you do BEFORE visiting the store(s)? Please select all that apply.

11 Nearly One Third Of Consumers Used Their Mobile Device For Shopping Related Activities While In A Store Smartphones Were The Most Common Device Used Used Mobile Device For Shopping Related Activities 69% 31% I have not used my smartphone as yet in the shopping process but do intend to in the future. When shopping, I'll use my phone to compare prices at stores. Yes No Yes, Smartphone Yes, Tablet Yes, Feature phone (regular cellphone) Yes, Internet- Enabled Device (ipod Nano, ipod No, did not use device Type of Device Used 6% 3% 3% 26% Using a smartphone has made it much easier to check out deals online while I'm shopping in a store. 69% Q5. Did you use your mobile device for any shopping-related activities WHILE IN THE STORE(s)?

12 In-Store Mobile Usage: Most Checked Prices While in the Store About Half Read Reviews About One Third Scanned Bar Codes and Sought More Info How Mobile Device is Used While In Store Checked Price 60% Reviews 46% Scanned Bar Code 35% More Info 34% Coupons and Discount Codes Checked Availability Photo Store Locator Check-In 19% 14% 14% 30% 27% I mainly use my phone to look up prices and reviews while I'm shopping. I've found the Amazon PriceCheck app to be particularly helpful, because you can just scan the barcode and it finds the product (and other comparable products) for you. Advice 10% Q6. How did you use your mobile device WHILE SHOPPING IN THE STORE(S) for consumer electronics? Please select all that apply. Q7. How does using your mobile device while at a store impact your shopping experience? Q8. Did you plan to use your mobile device as part of your shopping process?

13 Two-Thirds of Shoppers Who Use Their Mobile Device in the Store Say it Makes Them More Likely to Buy the Product Impact on shopping experience Makes me more likely to buy the product 65% Makes me less likely to buy the product 5% Used Mobile Device For Shopping Related Activities Yes Does not impact my purchase decision 30% 69% 31% Q6. How did you use your mobile device WHILE SHOPPING IN THE STORE(S) for consumer electronics? Please select all that apply. Q7. How does using your mobile device while at a store impact your shopping experience? Q8. Did you plan to use your mobile device as part of your shopping process?

14 In-Store Mobile Device Users Were More Likely to Do Online Research AFTER Their Store Visit Online Research AFTER Store Visit 42% 3% 45% 62% 53% Yes, on mobile device Yes, on computer No 18% Used Mobile Device IN STORE for Shopping Related Activities Did NOT Use Mobile Device IN STORE for Shopping Related Activities Q9. Did you do any online research AFTER visiting the store(s)?

15 Nearly 6 In 10 Shoppers Did Online Research After Visiting a Store Checking Prices and Reading Reviews are the Most Common Post-Store Visit Activities Research Activities are Similar Whether Before, During or After Shopping Checked prices of the product(s) at online retailers Type of Research After 73% Read reviews of the product(s) 59% Online Research AFTER Store Visit Looked up product features 53% Yes, on mobile device Yes, on computer No 15% 50% Yes (Net) 58% Checked prices of the product(s) at physical stores Checked in-store availability/stock Asked friends for advice online (social networks, Checked warranties 13% 12% 21% 40% My husband will go look at products at a store and then shop on line to compare prices and look for a better deal. 42% Checked other store hours 10% Total Looked up directions to other stores Q9. Did you do any online research AFTER visiting the store(s)? Q10. What type of online research did you do AFTER visiting the store(s)? Please select all that apply. 4%

16 About 6 in 10 Consumer Electronics Shoppers Ultimately Made a Purchase Shoppers Were Evenly Split Between Purchasing Online or In-Store Where Purchased? In a Physical Store Online Did Not Purchase 54% 55% Purchased (Net) 59% 41% Total Q11. Where did you end up purchasing your consumer electronics product(s)?

17 Those Who Used Their Mobile Device in the Store Were More Likely to Make a Purchase In-Store Mobile Users Were More Likely to Buy Online However, Nearly One-Third Did Make a Purchase In-Store Didn't Purchase Purchased Product Used Mobile Device IN STORE for Shopping Related Activities In A Physical Store Online Did Not Purchase 41% 59% Consumer Electronics Shoppers 29% 71% Those Who Used a Mobile Device In- Store 30% 42% 29% While I was shopping in Walmart I saw a better prices for it online. I went home and brought it for a cheaper price online and had it shipped free to Walmart! 4 in 10 Showroomed Q11. Where did you end up purchasing your consumer electronics product(s)?

18 Top Reasons for Shopping Online vs. In Store Price Is the Top Driver of Online Purchases Convenience and the Ability to Try/See the Products are the Top Reasons for In Store Purchases Why Purchase Online Why Purchase In Store Price 74% Convenience 51% Convenience 53% Try It/See It Price 44% 44% Selection/Availability 39% Selection/Availability 29% Research/Info Saw an Ad/Promotion/Sale 24% 31% Saw an Service Trust 17% 25% 24% Preference/Habit 11% Shop Experience 16% Spontaneous 7% Preference/Habit Spontaneous 4% 10% 55% 54% Purchased Online Purchased In Store Q11. Where did you end up purchasing your consumer electronics product(s)? Q14. Why did you purchase the following Consumer Electronics ONLINE vs. in a STORE? Q15. Why did you purchase the following Consumer Electronics in a STORE vs. ONLINE

19 Top Reasons For Shoppers Not Making A Purchase: Cost, Just Looking, Not Being Ready Q12. Why didn t you end up buying the product(s)?

20 Biggest Spenders Did In-store Research on a Mobile Device Average Amount Spent $1,539 $891 $929 Total Used Mobile Device While Shopping Did NOT Use Mobile Device While Shopping

21 Over A Third Of Shoppers Recall Seeing Ads For Consumer Electronics They Were Shopping For Among These Shoppers Over 7 In 10 Report Seeing Digital Ads 35% of people recalled seeing ads Why Purchase In Store Digital Ad Influence Online Ad 50% from retailer Groupon type site Social Media 14% 14% 36% Digital (Net) 71% 38% 50% 28% Online coupons 8% Mobile App TV 7% 64% Yes, made me visit a physical store Yes, made me visit an online store No, did not influence either way Print Ads 54% Direct Mail 35% Billboard/other signage 10% Q17. Do you recall seeing any ads for Consumer Electronics around the time that you were shopping for the product(s)? Q18. Where did you see these advertisements for Consumer Electronics? Q19. Did seeing the following digital ad(s) influence your decision to visit a store or online retailer?

22 In-Store Mobile Users Were Much More Likely to Make Unplanned Purchases While Shopping 1 in 3 Bought Something Spontaneously in the Store 1 in 4 Bought Something Spontaneously Online Made Unplanned Purchases Did NOT Use Mobile Device While Shopping 3% 7% 90% Used Mobile Device While Shopping 22% 32% 56% Yes, while shopping in a store Yes, while shopping online No, I did not buy any extra Consumer Electronics products that I hadn t planned to buy Q13. While you were shopping for your product, did you end up buying any other Consumer Electronics products

23 On Average, Mobile Device Owners And In-Store Mobile Device Users Spend More On Consumer Electronics Amount Spent Mean Spent = $891 $1,010 $533 $1,539 $929 24% 28% 25% 27% 12% 19% 15% 42% 21% 26% $1000 or more $500 to $999 14% 21% 28% 23% 20% 11% 16% 10% 10% 8% 21% 5% 8% 4% 7% 1% Total Mobile Non Mobile Used Mobile Device While Shopping 22% 12% 12% 6% Did NOT Use Mobile Device While Shopping $250 to $499 $100 to $249 Q16. How much have you spent on Consumer Electronics over the past 6 months?

24 More Consumers Engage In Pre-Shopping Research Most Lucrative Buyers Do In-store Research Most Mobile In-store Shoppers Do Post-Store Research Type of Research Done Before Store Visit During Store Visit After Store Visit Checked prices at online retailers Read reviews Looked up product features Checked prices at physical stores Checked in-store availability/stock Asked for advice online (social networks, ) Checked warranties Checked store hours Directions to the store Scanned Bar Code More Info Coupons and Discount Codes 6% 4% 21% 16% 10% 13% 15% 12% 14% 10% 27% 30% 33% 35% 34% 40% 46% 53% Did NOT Use Mobile Device IN STORE for Shopping Related Used Mobile Device While Shopping 60% 59% 59% 18% 73% 76% 80% 79% Online Research AFTER Store Visit 3% 45% 53% 42% 62% Yes, on mobile device Yes, on computer No Check in 14%

25 Appendix 25

26 Top Comments Key Verbatims I showroom every single electronic item that I buy. I want to be able to try it out before buying but I also want the lowest price when purchasing so I end up finding a lower price online every time. I have never found a price at a store that I couldn't beat online. Why would anyone pay a higher price to buy an item in a store? I think the bar for "showrooming" has really been set by Apple. Of course you can actually buy Apple products in the store but the prices are crazy and for lots of other reasons it is less about taking the sale on the spot and more about planting the seed (and offering amazing after sales support). The experience of playing around with a product, uninhibited with the fun atmosphere and friendly help of the Apple store is what sold me on the actual product. Showrooming is especially important for mobile devices, if something is going to be attached to my hip and used every day of my life I have to know how it looks, feels, carries (will it fit in my pocket?) and the user interface. I'm definitely a window shopper and technology has only increased this tendency. I enjoy just going and walking around stores on my lunch break or even some evenings or weekends because it's relaxing, but I'm never one to take a deal at face value - and using a smartphone has made it much easier to check out deals online while I'm shopping in store. It doesn't really matter what type of product it is - I do this for everything from toilet paper to electronics, although I'm much more likely to spend more time researching bigger ticket items. I mainly look up prices, but I also look at reviews while I'm shopping too. I've found the Amazon PriceCheck app to be particularly helpful, because you can just scan the barcode and it finds the product (and other comparable products) for you. I think I'm about on whether it makes me more likely to buy items in store or not - there have been times in the past before my smartphone days that I've walked away from deals to research them later and regretted not getting them when I discovered it really was a good deal. Now, having the technology at my fingertips, if I find out it's a great deal on the spot, I'm more likely to buy it then. However, there are also many times when I look it up online while I'm shopping, find out I can get it cheaper elsewhere, and walk away - unless the convenience of having it immediately outweighs the better deal. All that being said, if I'm pressed for time, I'm much less likely to showroom and more likely just to trust my instincts on whether it's a good deal or not (and take the chance of having to possibly return it later). One thing about the in-store experience that would make me wait to buy a product online is the length of the checkout line. If I can get as good a deal or better online (or maybe even a little more) and don't need the product right away, and it's the only thing I'm buying in the store that day, I might avoid the long line and opt for the ease of having it delivered in a couple days. Plus, there's always the possibility of finding a coupon code online or getting points through a rewards site to get an even better deal I do my research online before making any major purchases. It narrows my list to just a few makes and models. I will then go to see these at a local store to make my final evaluation. Where I make the purchase depends on where I find the best balance of value and service. While I carry my smartphone with me, I rarely use it in a store. I did my research already and I know what the going prices are before I leave home. In a great many instances, these stores wind up being nothing more than an Amazon showroom. The stores are rarely price competitive and almost none of them service anything they sell on site. In-store service was the last unique feature stores had, but now even they mostly ship any items needing repair to some distant place. Customer service has gone, too. Often the in-store staff know less about the products than I do. Cornering an employee is often impossible ( there are too few of them) and the result unsatisfying anyway. 26

27 Smartphones, flat screen TVs, tablets and laptops are the most popular consumer electronics shopped for in the last 6 months Shopped For In Past Month Smartphone 40% Flat screen TV Tablet Laptop or Computer 31% 31% 33% Headphones Digital Camera DVD/Blu-Ray player Gaming console 17% 15% 14% 12% MP3 player Speakers 7% 7% GPS device Home entertainment system ipod Dock 4% 4% 5% Other Consumer Electronics 8% Q1. Have you shopped for any of the following products in the last 6 months? You do not need to have purchased these products but simply have shopped for them. Please select up to 3 products that you most recently shopped for.

28 Ownership Laptop 81% Desktop Computer 74% Smartphone (iphone, Android, Blackberry, Windows Phone, etc.) 67% Tablet (ipad, etc.) 49% Feature phone (regular cellphone) 33% Internet-Enabled Device (ipod Nano, ipod Touch or other) 26% Q0. Which of the following do you own?.

29 Showrooming: Empowering Consumer Electronics Shoppers Kristina Sruoginis Research Director, IAB Questions? Joe Laszlo Sr. Director Mobile Marketing Center of Excellence, IAB Sherrill Mane SVP Research, Analytics, Measurement, IAB 29

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