Showrooming increases as online growth begins to slow

By

Barbara Santamaria

Published
Nov 16, 2017

‘Showrooming’ is becoming the latest trend in the retail industry, with a growing number of e-tailers moving into offline locations as online sales growth begins to slow down.

Brands including French clothing label Sézane, which had its beginnings on eBay before moving to a branded online platform, and one of Kate Middleton’s favourite online brands ME+EM have joined the trend by opening physical locations in London.

Sézane opened a pop-up store in London’s South Molton Street this month, while ME+EM has recently launched its third London store in Notting Hill.

But for these brands, the primary goal is not necessarily to generate sales through the tills but to reinforce customer loyalty. Ultimately, the idea is to drive sales online, according to Colliers International.

The company analysed more than 30 different online brands across the EMEA region which are becoming ‘showroomers’. It said the trend comes on the back of an expected decline in online sales, with the rate of growth in e-commerce sales forecasted to decline from 11% to 7% by 2021.

Showrooming is encompassing all types of brands, including companies which have been previously sold by stockists such as Samsung, Dyson and Volkswagen, as they start to explore the direct-to-consumer channel with their own store networks.

In the Netherlands, one of the online brands that has been most acquisitive of physical space has been bicycle retailer Fietsenwinkel. The company has opened more than 30 outlets, where consumers can test the products before buying them online.

“With the rate of web sales forecast to level out over the next four years, many e-retailers have identified ‘showrooms’ as one of the remedies to a decline in profits,” said Paul Souber, co-head EMEA retail at Colliers.

“Increasingly ‘Showrooms’ in physical shopping environments which both generate online sales, raise awareness of their company, promote brand loyalty and offer the customer an opportunity to see, touch and feel the products.

“The trend is also driven by cost considerations: it’s not uncommon for 40 per cent of online fashion orders to be returned by the customer without making a purchase. This is imposing a huge logistical and cost burden on the online brands.”

Taking physical space for showrooms makes also financial sense for brands, as showrooms are often located in non-prime property areas, which means rent prices are affordable, according to Colliers.