Webrooming vs showrooming – where do payments come in?

The concept of showrooming struck terror into brick and mortar retailers as e-commerce spending broke the 10bn mark last year. Now, as even more people shop online, the future might be less bleak – as long as retailers implement a faster payment structure.

Showrooming – when a shopper visits a store to look at a product but then purchases the product online from home – is still at epic proportions. Research by mobile phone operator EE shows that half of UK consumers now use their mobile device to browse for better deals while out shopping – even before they have left the premises.

According to the research, 44 per cent of consumers – more than 20 million Britons – now visit a physical store while browsing products online in the hope of finding a better deal.

E-commerce conversion rates themselves, however, are still fairly low. It could be argued that online shoppers actually find it easier to fill a basket with items and then abandon it, having not made the effort to step out of their homes to visit a store.

This has given rise to an opposing concept – webrooming. In this case, consumers research products online before going to the store for a final evaluation and purchase.

While retailers, who are eternally concerned with footfall in their physical stores, this sounds like an unexpected boon. But the final purchase at this state, even with prior research and planning on the behalf of the consumer, still faces the same hurdle.

According to a YouGov survey conducted this year, 66 per cent of people said that they would be likely to abandon their purchase if the queue in the shop was too long, if the payment process was too difficult, or if they deemed the purchase method insecure.

That puts payments right at the heart of this multi-channel blurring between physical and virtual shopping,” said Andrew Vorster, a technology and foresight consultant, at this year’s Payments Knowledge Forum earlier this week.

“The problem is,” he added, “we are not keeping pace.”

Vorster illustrated his point with a scenario he previously come across where a large retailer – which one, Vorster neglected to mention – with a chain of international clothing stores, found themselves faced with a customer who wanted an item in a size that wasn’t in stock. The merchant could check online, and found the item was available in their online store, to be paid for now and delivered directly to the customer in a matter of days.

At this point, the customer was happy to pay in person.

“Now this is where payments becomes a problem,” Vorster said. “The customer is in store holding their physical card. The card is definitely present – the customer is present with their card in their hand. But because the item is being dispatched from their warehouse, which is in Belgium, and their store is here in the UK that transaction has to go through their web shop. So the retailer is charged with a card not present fee!”

It is no wonder then, that it is a retailer like Apple who may lead the charge in the adoption of mobile payments.

“They made the card always present,” Vorster adds, “by removing the physical card and placing it in the phone.”

Retailers lose so much custom as a customer goes to pay, that it is no wonder that many are finally warming to the concept of mobile payments. A simpler payments system – iBeacons in the future for Apple products, NFC use for the tech giant and its many competitors, even contactless cards  – will bring some of the e-commerce profit back to brick and mortar stores. But this requires some thought – footfall, while important, is still profitless if payments do not become more central to a retail strategy.

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