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E-commerce in India – Unfavourable Business Environment

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In Part III of our E-commerce Challenges in the BRIC series, we highlight the challenges faced by online retail companies in India. Unfavorable business environment, profitability issues, consumer’s set notions on shopping are some of the key aspects that we discuss, in order to better understand where India stands in the e-commerce space.

Despite India being a rightful member in the BRIC group from the economic development point of view, in terms of e-commerce development, the country is typically not clustered together with Brazil, Russia and China. In AT Kearney’s 2012 E-commerce Index, India was not ranked at all, and the market is described as lacking the necessary technology to connect vast numbers of potential users to the internet, and extremely poor infrastructure preventing reliable delivery and returns. Opinions, however, are divided. According to McKinsey & Company, India indeed does have problem with low internet penetration and significant infrastructure barriers, but these issues are challenging, not disabling, e-commerce market.

Currently, Indian online retail accounts for around 1% of India’s overall retail market, according to Euromonitor, and is estimated to reach about US$1.3 billion in 2013. This might be far behind the market size of other BRIC countries, however, looking at the anticipated CAGR of 34% between 2005 and 2015 to reach over US$2 billion with expected share in overall retail to increase to 8%, it appears that the Indian market does have opportunities to offer. Some forecasts indicate a considerably more intense growth, even up to US$15 billion by 2017. The varied forecasts show how big of a question mark the market and its growth trajectory are.

One thing appears to be true though – despite still being a comparatively small market, potential long term growth might turn India into an attractive destination, with current internet users expressing strong interest in online shopping.

The market has the potential to accelerate, however, currently several challenges hinder its growth.

India e-commerce

The Challenges

  • Very low internet penetration – it is estimated that the internet penetration is about 12.5% of the population, far less than in any other BRIC country. Existing connections are largely characterized by low average broadband speed and unstable, often interrupted signal, which results in high online transaction failure rate. None of the Indian economy’s favorable economic developments, such as growing incomes and rapidly expanding middle and upper class, will translate into flourishing e-commerce market until larger proportion of Indian population is online and has access to reliable, fast connection.

  • Infrastructure and logistics inadequacies – given India’s vast size, order delivery is and will continue to be a problem, as the country is not able to develop road infrastructure at a pace fast enough to meet the demand, therefore is postponing investments in infrastructure in rural and remote areas (where majority of Indian consumers are based). Large part of investment in the e-commerce market goes into warehousing infrastructure, inventory management, in-house logistics and delivery logistics, as currently only in tier-1 cities (and in a few tier-2 cities), e-commerce companies can ensure relatively timely and safe order delivery. Infrastructure issues significantly affect the online shopper’s willingness to shop regularly, and many of them abandon their online baskets after seeing the estimated time of delivery. From the e-retailer’s point of view, all these issues generate additional costs, as they either develop own delivery capabilities or partner with several delivery services providers (who often also lack delivery management technology such as fleet or parcel tracking). Overall, it is estimated that the logistics costs in India are among the highest in the word, primarily due to large proportion of poor quality physical infrastructure.

  • Strong off-line shopping culture – traditional, often small, local retailers for years have been part of the shopping landscape, becoming the synonym of shopping experience for Indian consumers. While this is changing with proliferation of malls and organized retail, those local shops still are a tough competition for potential online stores, especially that they have managed to build lasting, often personal relations with customers in their community. These traditional shops are located in the customer’s immediate neighborhood, with some of them offering free delivery, which makes online shopping advantage of purchasing from home much less relevant. Further, consumers’ familiarity with traditional, off-line shopping makes them wary and distrustful of online shopping, due to a range of reasons: the products cannot be touched and felt, e-commerce and online consumer protection laws are yet to be developed in India, and online payments security is still far from perfect.

  • Challenge with achieving profitability – given the nascent stage of e-commerce development in India and the overall high price-sensitivity of Indian consumers, fierce price competition (or even price wars) have been present in Indian e-commerce space. Players attempt to outbid each other with lower price, to the extent that some of them offered prices below their cost. Players’ profitability has also been compromised due to the need to invest and develop overall e-commerce ecosystems, and attract customers to the very concept of buying online. This resulted in the market being plagued with profitability issues, even for the market leaders such as Flipkart, Jabong, or Myntra, with several market exits by players who were not able to continue operations in such unsustainable way. Over time this will lead to higher consolidation in the market, as further companies decide to exit, while the stronger ones (probably with better financial backup) survive and acquire smaller players –more than half of e-commerce companies are expected to disappear over the next 6-8 months. These developments might put a brake on price reductions, but will continue to make it difficult environment for new market entrants.

  • Dominance of cash-based transactions – cash payments by far dominate in India, estimated at 80-90% of all payments and more than half of online transactions. The use of credit cards has been constant over past years, estimated at around single digit percentage share of population using a credit card. The use of debit cards has increased, and currently some 200-250 million issued cards, however, majority of Indians are still uncomfortable with this way of payment, and often do not feel the need to use it. While cash-on-delivery could be an option here, e-commerce thrives in environments with high use of electronic money. For the time being, cash-on-delivery is quite popular, however, it is risky and costly for e-retailers, as they have to finance the purchase and delivery till they receive the payment, and as many as 45% of orders are rejected without paying, generating costs. In attempts to rationalize costs to deal with profitability issues, online retailers will have to start promoting higher use of electronic payments, however this might mean losing a considerable customer segment of shoppers who will continue to be interested only in cash transactions. Therefore, few players are likely to decide to make such a bold move, and cash payment will continue hampering e-commerce market growth and negatively affect players’ bottom line.


India’s e-commerce market faces a mix of common challenges which exist across the BRIC countries, and inherent issues pertaining to unfavorable business conditions. Consumer culture and infrastructure issues aside, the fact that the market has to compete almost exclusively on price is hurting the current breed of players, and perhaps forcing potential new entrants into re-thinking their business models. The market is plagued with logistical nightmares, in spite of the fact that it only caters to a minuscule proportion of the potential customer base. In view of the challenges, it is no wonder that there are such divergent perspectives on e-commerce’s growth potential in India.

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Part I of the series – E-commerce in Brazil – Marred By Political and Social Influences

Part II of the series – E-commerce in Russia – Strong Impact of Consumer Culture

by EOS Intelligence EOS Intelligence No Comments

E-commerce in Russia – Strong Impact of Consumer Culture

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Part II of our E-commerce Challenges in the BRIC series brings us to Russia, a market with significant growth opportunities which are impacted by customer’s traditional retail perceptions and infrastructure woes.

With a share of only 1.9% held by online sales in total retail sales, it would appear that Russian e-commerce market is almost irrelevant. However, the strong growth dynamics promising an average annual growth rate of 35% and a market size of US$36 billion by 2015, give a good context of the scale of opportunities. International online retailers are increasingly eyeing the Russian market with a view of capturing the growing e-commerce consumer base; however, some of the global giants, such as eBay or Amazon, still lag behind strong local competitors, such as Ozon.ru.

Opportunities are many, considering that already in 2011, Russia overtook Germany to become the market with the highest number of internet users, as well as the fact that it is Russia that prides the highest per capita income amongst all BRIC countries (with per capita income at PPP of US$17,700, compared with Brazil’s US$12,200, India’s US$3,900, and China’s US$9,100). However, as many e-commerce entities operating in this market have already discovered, Russian market is challenged by its own set of issues that hold back the market to expand even faster.

Russia e-commerce

The Challenges

  • Inadequate infrastructure – similar to many other developing countries with vast territories, Russia has by far insufficient and inadequate infrastructure, a fact that negatively affects delivery times, safety of cargo, and generally prevents the e-commerce market from developing to its full potential. Russia’s major transportation method is railway and road. With insufficient and outdated rail infrastructure, as well as bad or non-existent road network, paired with long distances required to cover in this large country, deliveries outside metropolises such as Moscow or Saint Petersburg often take a week to reach the online shopper. Also, on the online retailer side, delivering orders to customers across this huge country, particularly without a reliable national post system, generates significant costs and considerable time issues. Several larger players that have sufficient financial resources at hand need to invest in building own delivery networks and infrastructure wherever possible, as such services are not commonly available due to lack of specialized, reliable third party providers. This is, however, often impossible for smaller players or newcomers to the market, as it requires substantial investment.

  • Try-it shopping attitude – Russian shoppers often like to treat online shopping as ‘try-at-home’ service. They order many products, try them out at home, with the assumption that they might keep just few or even none of them. This requires online retailers to be rather flexible with product return options, and create process that allow for quick and efficient dealing with rejected products and cash refunds. This shopping attitude also results in retailers having relatively high inventory level, as well as devoting considerable time and resources to deal with orders that will eventually not generate revenue for them, as it is estimated that one in four deliveries of online purchases in Russia is refused and returned by the customer. Further, the infrastructure problems and lack of reliable public postal system clash with the try-it shopping attitude, as it makes it difficult for online customers to return purchased products, making them hesitant to shop online.

  • Cash payment shopping culture – credit and debit cards are not widely used by Russian shoppers, on the back of distrust towards safety of advance online payments and honesty of online retailers, as well as requirement for special card authorization before a purchase (online payment cannot be completed within a few clicks). This has led to high dominance of cash-on-delivery payment, which currently accounts for about 80% of online sales of products such as clothes, shoes, and electronics. Online retailers must cater to this demand, which requires them to finance product delivery while receiving payment later, leading to problems with cash flow and returns/rejects. Further, online retailers often incur additional costs of employing own team of cash couriers. While the use of debit and credit cards will increase, the process will be rather slow and long, as apart from developing reliable and safe online payment systems, a considerable cultural change to cash-oriented mindset in customers must occur.

  • Strong local competition – this is a challenge for newcomers to the Russian e-commerce market, especially foreign players. While it is still in early stages of development, there are several strong and successful local players (e.g. Ozon.ru, KupiVIP, Lamoda, Utkonos, Svyaznoy, X5, Wildberries.ru), who know how to navigate through nuances of online retail in the country, and enjoy strong, often loyal customer base. Ozon.ro is the unquestionable market leader, with grounded position, large customer base, own logistics arm, and wide offering, resulting in its extremely good performance (revenue hike of 91% in H1 2012 to US$232 million, expected to reach US$1 billion in 2014). Local competitive landscape is also infused with a number of smaller retailers that focus on narrower product categories, providing broad offering with a given category, e.g. consumer electronics provider Citilink or car spare parts store Exist.ru.

  • Consumer nationalist inclinations demanding localization – while many Russians appreciate foreign trends, there is a strong sense of nationalism that makes Russian shoppers less accepting and more likely to reject foreign influences and brands, if they do not localize their offering and do not provide fully Russian-language experience. This might pose a challenge for foreign e-commerce entities, expecting to transplant their business and operating models directly to the Russian market.

 

Russia’s e-commerce market is heavily influenced by customer mindsets and attitudes, which are still based on traditional shopping experiences, thus acting as hindrance to the pace of online retail growth. Inadequate and inefficient infrastructure has also played its part in creating challenges that result in cost and operational losses to existing players, and scares new entrants from investing in this space.

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E-commerce in Brazil – Marred By Political and Social Influences – read the first part of our E-commerce Challenges in the BRIC series.

by EOS Intelligence EOS Intelligence No Comments

E-commerce in Brazil – Marred By Political and Social Influences

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The opportunities for e-commerce offered by several emerging countries, such as the BRIC, has been analyzed at length, and quite rightfully so, given their expanding economies, growing middle class, soaring disposable incomes, paired with higher internet and mobile penetration. While the opportunities coming from these transformations are plentiful, e-commerce markets in the BRIC countries also face serious challenges to their development, some of them common across all four countries, some unique to single markets.

We explore these challenges in a four-part series to understand the major roadblocks influencing growth of the e-commerce industries across Brazil, Russia, India and China.

Brazilian consumers are still relatively new to e-commerce, with current propensity to shop online often compared with the penetration rate witnessed in the US market in 2000-2001. This might seem like a small market, however, the e-commerce growth in Brazil is strong, estimated at 21% during the first half of 2012. According to AT Kearney, Brazil’s 80 million Internet users spend about US$10.6 billion online annually, the largest online spending across Latin American markets. Brazilians are expected to spend US$18.7 billion per year by 2017. These might be modest estimates, considering that eMarketer, a digital marketing portal, already forecasts that retail e-commerce sales in Brazil will grow by 14.8% in 2013, to reach US$13.26 billion. While the market appears to be poised for a very promising growth period, several challenges will continue to put a break on sudden growth.

Brazil e-commerce

The Challenges

  • Troublesome and bureaucratic procedures to set up and run e-commerce business – these structural problems make it difficult for local and foreign players to enter the e-commerce market (or set up a business entity in Brazil in general). Burdensome regulations and procedures mean that it might take even 6 months to establish an e-commerce entity. Further, while operating, the entities are often challenged by frequent litigations and lawsuits over variety of issues (e.g. the domain used). Even with no litigations, Brazil has a generally paperwork-heavy business environment, and this is particularly challenging in a relatively new industry such as e-commerce. All these difficulties have led to Brazil being placed at 130 (out of 150) rank in World Bank’s Ease of Doing Business in 2013 (behind countries such as Ethiopia, Yemen, Uganda, or Pakistan).

  • Inadequate e-commerce regulations – while setting up a business appears overly bureaucratic and regulated, several aspects of e-commerce operations are under-regulated, affecting clarity and smoothness of operation as well as consumer trust. Legislation is slowly, yet gradually being introduced, e.g. only in mid-2013, a seemingly basic and obvious requirement was introduced for e-commerce entities to clearly and visibly display their registration numbers, contact details, purchase terms and conditions, and customer’s rights. While this step is likely to help build customer trust, it covers just a tip of regulations necessary in the market.

  • Inadequate infrastructure affecting order delivery – the country’s weak and immature infrastructure has a negative impact on orders shipping. Brazil is a country with vast territory, and majority of transportation is done by road. The country’s road infrastructure (both city streets and highways) are in poor condition, many of them unpaved, affecting safety, delivery time as well as damaging the cargo and trucks. Overall, receiving a delivery package by a customer located outside of major Brazilian cities stretches to a week at a minimum, with frequent cases of customer complaints about packages not arriving within two weeks or more.

  • Underdeveloped shipping and delivery services – while delivery services are available, many of them are provided by small, often family owned companies, that have limited coverage area and lack parcel tracking systems, thus there is generally inadequate availability of reliable courier services. The government-owned national post, (Empresa Brasileira de Correios e Telegrafosand), does not commonly offer parcel tracking options, inviting fraud, and is considered unreliable and slow.

  • High taxes and complicated tax structure – issues with taxes are often placed amongst top challenges of e-commerce in Brazil. Taxes are high and numerous, which significantly increases overall costs – duties, taxes and fees can double the original price of a product, and can vary considerably depending on product category. Payroll taxes in business innovation sectors reach even 80%. It is estimated that on average, business owners and executives spend 30% of money and 50% of time on dealing with tax-related issues. Further, complex tax structure drives added costs for lawyers and accountants compensation in order to navigate through various issues with the tax regulators and facilitating tax differences between Brazilian states (as there is no uniform tax across the country).

  • Insufficient talent availability – Brazil’s expanding e-commerce market creates jobs that are difficult to fill, given the shortage of qualified workers, people with e-commerce experience or at least an understanding what a particular e-commerce job entails, e.g. e-commerce web designers, experienced IT and business process professionals or high-quality, competent customer service specialists. The lack of good customer service acts as a deterrent to customer base growth, as according to McKinsey’s Consumer and Shopper Insights from July 2012, Brazilian shoppers who no longer shopped online listed previous bad experience with customer service amongst key reasons for turning away from online purchases.

  • Online payment security concerns – the lack of trust amongst Brazilian consumers towards safety of online purchases and transactions, deters many of them from buying online and using internet banking in general. Therefore, the predominant payment option that is currently used and preferred by customers is the ‘boleto bancario’, a code receipt that is generated on the website during the purchase, printed by the online shopper and later taken physically to a bank or a post office where the payment for the purchase is made. On the one hand it allows to satisfy consumers concerns about payment safety and to tackle the issue of many users not having credit cards or internet-purchases enabled debit cards. On the other hand, however, it is contrary to the very concept of shopping online (i.e. without the need to physically go to the shop), and extends the entire process of completing the purchase. Further, in order for e-commerce entity to offer ‘boleto bancario’, it should be led by a Brazilian citizen or at least in partnership with a Brazilian citizen. While foreigners can fulfil prerequisites of offering ‘boleto bancario’, the process of filling those requirements is lengthy and difficult, especially when compared with PayPal functioning in several other markets.

  • Installments shopping culture – Brazilian customers are used to, and hence expect payment options that allow for multiple and no-interest instalments or delayed payment options, resulting in e-commerce entities requiring higher working capital to finance purchases while the customers’ payments for current purchases are received after several weeks. Further, bank involvement to handle the instalments increases costs for online retailers, since bank receives a commission (which is not paid by customers as their instalments are zero-interest).

  • Language barrier – while this challenge might not be of particular relevance to domestic start-ups, international online retailers find it demanding that the entire e-commerce experience must be provided in Portuguese, and that having previous experience in Spanish-speaking market does not automatically make it easy in Portuguese, as these are two different languages (though western parts of the country have considerable base of Spanish-speaking consumers). This pertains to everything from language used on the online store interface, entire customer service, as well as the fact that many local IT and programming specialist speak only Portuguese (with extremely limited English), making it difficult for foreign start-ups to simply copy their experience and solutions to the Brazilian market.

While there are several challenges that currently undermine the growth potential of e-commerce in Brazil, the gradual changes in regulatory environment, customer service and improvement in infrastructure should positively influence the demand for e-commerce services in the future.

by EOS Intelligence EOS Intelligence No Comments

Yet Another Word on Showrooming. Should Brick-and-Mortar Retailers Start Packing Their Bags?

We all seem to have heard the intriguing word of ‘showrooming’ some time recently, term that stands for consumers going to a physical store to see, touch, and test a product before buying it somewhere else, in most likelihood from an online store of a competitor retailer. Showrooming has been a buzzword for some time now and it is making some retailers very nervous. News article titles, ‘The Next Victims of Showrooming’ or ‘Retailers Stand to Suffer from ‘Showrooming,’ paint a rather grim picture for retailers. Is it really the case?

According to the 2013 TNS Mobile Life Study, some 30% of shoppers globally admit to showrooming, with an estimated 20% of them using mobile phones while doing it, in search of price comparisons, product specifications, consumer reviews, expert opinions, checking product availability in different stores, etc. Although showrooming is increasingly a worry for retailers, they might take relief from the fact that, at least for now, consumers still prefer to get product details from a store assistant, than to look up the information online. European consumers are particularly attached to shop assistants – over 50% of consumers prefer interacting with store staff over getting the information on their phone, with the ratio being as high as over 65% in some European countries, e.g. Poland. What retailers are unhappy to hear, is that this ratio is expected to continue to decline, as the penetration of smartphones increases, shopping and comparison applications proliferate, and consumers get familiar and comfortable with using them on a daily basis.

Online stores don’t mind at all

Obviously, online retailers are very eager to take advantage of this new trend, and encourage consumers to use their sites to compare prices and make final purchases. Some online stores, e.g. Amazon, offer free apps to check prices in their store and offer special discounts if the user purchases from them after using their price-check application.

Some online retailers go even beyond that. Bonobos, men clothing online retailer, made the headlines recently by opening “stores that don’t sell anything”, as quoted by USA Today. These ‘Guideshops’, which are regular brick-and-mortar locations, are used just to showcase the online offer, allow customers to feel the fabric, check the sizes, and try on the clothes, before purchasing them online. It seems silly and contradictive to the essence of online shopping, but Bonobos appears to have gotten on the path to strategically benefit from the showrooming trend.

Traditional retailers still slow to react

There is no way the showrooming (and e-tailing) will come to a halt and magically disappear to the satisfaction of traditional retailers. Thus, it is clear the retailers cannot just sit and wait for the trouble clouds to go away, as they risk becoming a showroom with high foot traffic with no sales to justify their operations. Physical, traditional retailing will inevitably decline to some extent, so the retailers must devise strategies to tackle the issue head on – fight it or embrace it.

We have already seen retailers’ attempts to counteract the showrooming. Some of them started charging an entry fee – for just looking through the products in the shop, a fee later deducted from the final bill if any purchase is made.

Overall, it’s neither good nor bad, depending on whether you view it as the death of physical retail or a kick to traditional retailers to innovate their cross-channel experience. Those who are tackling it head-on may actually consider showrooming the future of retail.” – Brian Gillespie, Continuum, Global Innovation and Design Consultancy, for Mashable.com, May 2013

Needless to say, such approach is likely to be very successful in limiting showrooming – and probably overall sales as well. There will be a group of consumers, who will never come in the shop that carries notification of entry fee on its door. People who will enter, but won’t find anything worth buying, will be left unsatisfied with spending money on… nothing in return. It can be fairly assumed that this group of consumers will not be converted into customers later on.

Customer experience is the key

The smarter option (though not necessarily an easier or cheaper one) is to deal with reality by embracing the new trend. With good strategic thinking, investment and willingness to change the way customer is handled day-to-day, showrooming can probably be flipped to an advantage, or at least considerably neutralized. Let’s look at some ideas of what retailers can and should do in this uneven battle with showrooming.

The key weapon, currently underutilized by many retailers, which should be improved and used against showrooming, is customer experience. Some industry experts say that it is not the price, but the lack of great experience in physical shops that is the key driver pushing consumers to buy online.

E-commerce is not the reason people don’t shop in the store. Customers come to a retail environment for the recognition.” – Jean-Pierre Lacroix, president of Shikatani Lacroix Design, for Stores Magazine, March 2013

If they lack the right experience, they focus on other criteria for store choice, such as price or convenience, which allow online stores to win growing share of consumers’ wallets. Industry experts indicate that excellent in-store experience can become the key weapon in retailers’ hands:

  • Engage with ‘showroomers’, as since they are showrooming and browsing, it means they have been hooked to the idea of purchase and are actively considering buying a given product. More importantly, they are already in your shop. Look for ways to engage with the ‘showroomers’, and you might be able to convert them into your customer. Reward them for already being at your store – offer better discounts, deals on immediate purchases, etc. available to those who are already in.

  • Online-enable the store. Encouraging online presence in your store might sound crazy. However, your store might be a physical location, but it does not mean it is cut off from the outer world. Don’t expect the customers to go off-line when they are in your brick-and-mortar shop – they probably stay online all the time. Entwine online experience with your in-store experience. Introduce store mode of your website, ability to connect via WIFI when on the premises, reward with deals accessible via this mode for purchases from the physical shop

  • Make it speak. Instead of placing product info in print on the shelf, allow customers to browse product information via their smartphone (or self-operated information kiosks on the store floor), searching via QR and barcodes, linking to interactive content available on the in-store mode website, including product specifications, reviews, additional content, e.g. virtual fitting rooms for clothes or visualization for furniture purchases, interactive maps guiding the customer through the store to specific products

  • Revamp the role of your floor staff. They are not there just to show the customer down the aisle, answer basic questions about the product, and ring the register bell. The staff is the element that can really make the difference, engage and capture the customer. The key here is to wow the customer with helpful and knowledgeable assistants, who offer depth of information that goes beyond what a typical consumer can anyway find online. Invest in turning your assistants into ‘mobile points of service’, that is create tablets and smartphones-equipped staff with access to CRM and product data, and provide them with certain level of autonomy to offer special discounts and other deals right on the spot when interacting with individual customer

  • In large stores, where self-service naturally dominates (e.g. groceries), invest in precision retailing. Your customers are probably enjoying the level of personalization when shopping on Amazon and the likes, so it is time to start using your big data effectively. Some developers already offer cloud-based enterprise solutions allowing for one-to-one, real-time retailing personalization, which includes personalized content allowing for virtual shopping lists, special offers presented at the point of decision in the shop, deals tailored depending on the past purchase history, shopping frequency, etc.

Retailers can also opt for other weapons, not necessarily linked directly to the customer in-store experience, but rather ways to attract them to come through the door:

  • Use technology to draw customers – adopt geo-location solutions and use GPS or NFC technologies to make yourself visible to the consumers remaining near your store

  • If you can afford it – try price matching. While customer experience might be the selling point of physical experience, a lot of customers are price-oriented after all. This might be dangerous to the margins, so not all retailers are able to afford this strategy

  • Emphasize the advantage of immediacy in two meanings. First, immediacy of information across all senses: the customer gets the information about the product (especially if in-store information incorporates elements of digital media and is as diverse and exhaustive as online) and can feel and try the product at the same time, something that online shopping will never be able to offer. Second, once the purchase decision is made, customers in general would prefer to get the product right away. This is a huge advantage for physical shops, where no shopping time has to be added (as still rather few online stores are able to execute ‘same-day-delivery’ on most of their products)

  • Make it exclusive by carrying unique products, limited editions, products with customized content, which will make it impossible to compare prices with other retailers and will attract the traffic towards your door. Unique products alone will not support all your sales, but will drive some level of unplanned purchases that are made ‘by-the-way’

There is no way to say which physical retailers will be able to withstand the pressures of the showrooming trend, and what mix of tactics will turn most successful. Showrooming potential to negatively impact retail industry indicates that it should be treated seriously, and dealt with by strategic solutions rather than immediate measures. The development of comprehensive solutions should therefore be a task for retailers’ strategy top executives, and must go far beyond attacking consumers for their willingness to participate in this trend.

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