How One E-commerce Giant is Making a Profit from Webrooming

In Featured on App, Marketing and Sales, Omnichannel by Julia EislerLeave a Comment

How One E-commerce Giant is Making a Profit from Webrooming

Webrooming, also referred to as reverse showrooming, is when consumers research products that they're looking to buy online before ultimately going to a brick-and-mortar retailer to make the final purchase.

Brick-and-mortar retailers have been struggling to deal with showrooming for a while now, but have often failed to acknowledge that the problem is one faced by e-commerce sites as well. With consumers increasingly expecting an omnichannel shopping experience it has been difficult for all retailers to figure out how to deal with this issue.

Click here to see which 10 major retailers are most threatened by mobile showrooming.

Major multi-national furniture e-tailer, Wayfair LLC, may have found a solution to at least part of the problem. They've found a way to make a profit off of consumers who use their site for webrooming.

Wayfair acknowledges that a lot of their site's viewers use the site solely for research purposes, with no intention of making the final purchase online. So what did they do? Wayfair has created a program called GetItNearMeâ„¢, which allows them to partner up with local brick-and-mortar retailers by selling advertisements on their website.

Why would Wayfair send their customers to their competitors? Quite simply, after much research Wayfair determined that the advertisements made no difference in the purchasing patterns of their customers. If the customer was going to buy online, they were going to buy online; and if they weren't, then they weren't.

Today approximately 170 advertisers participate in Wayfair's GetItNearMeâ„¢ program making it clear that this program is a win-win for both Wayfair and their brick-and-mortar competitors.

So how exactly does the program work? Well, for starters, the advertisements are only shown to customers who are actually looking at products that you sell. The potential customer must be actively researching the product before any ads for brick-and-mortar retailers are shown to them. Additionally, marketers for brick-and-mortar stores are able to select the radius that a customer must be located in from a store in order for the advertisement to even appear for them, ensuring that only customer's within a reasonable travel distance will see the advertisements.

As if that wasn't enough incentive for brick-and-mortar retailers to participate in the program, Wayfair doesn't charge brick-and-mortar stores anything for just hosting the advertisement on their site. Instead, a potential customer has to actually click through the ad to the brick-and-mortar company's site before the local retailer owes Wayfair any money.

What do you think of Wayfair's strategy for making a profit off of Webrooming?

Interested in learning more about e-commerce? Check out our upcoming Home Delivery World Canada conference!

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