"Showrooming" threat under control: U.S. retail CFO survey

Tue Oct 2, 2012 11:37am EDT

(Reuters) - Finance chiefs at dozens of U.S. retailers think their companies have so-called showrooming - the phenomenon of shoppers using brick-and-mortar stores to check out merchandise but then buy it online - under control, according to a poll released Tuesday.

What CFOs are more concerned about is how consumer confidence may be affected by next month's presidential election, according to an annual poll by BDO USA, the assurance, tax and financial consulting firm.

An overwhelming majority of chief financial officers surveyed, 88 percent, said that they are not concerned about showrooming. The practice has become a larger issue as more shoppers use their smartphones and tablets while in stores to check competitors' prices and even make purchases.

Showrooming has had a major impact on consumer electronics, with chains such as Best Buy Co Inc (BBY.N) stung by shoppers visiting stores just to look over merchandise rather than buy. Several chains have stepped up efforts to stock exclusive items or sell goods with unique codes to help mitigate the practice.

"Showrooming is not a fad or something that is just cool to do for the moment and will pass," said Stephen Wyss, partner in the Retail and Consumer Products Practice at BDO USA. "I think it's a real indicator of consumer behavior, and how consumers are going to continue to behave, using technology, to maximize their savings and the efficiency of their shopping."

But retailers surveyed by BDO appeared to be fairly confident that their strategies will offset the impact of showrooming, Wyss said.

One-quarter of CFOs said that their primary strategy to counter showrooming is improving customer service. Another 25 percent said they are expanding options for in-store pickups and returns, 17 percent are using exclusive goods, and another 17 percent are working on matching prices with online retailers.

"Retailers are focusing on that customer experience and customer service aspect that many consumers will value, the key is how much will consumers value it over a bottom line price," he said.

One area of focus is to continue to improve mobile shopping, with 77 percent maintaining their investments in mobile commerce for the upcoming holiday season, while 19 percent plan to increase their spending, BDO said.

Retail CFOs anticipate that online sales will rise 5.9 percent this year, while they predict total sales will rise 4.5 percent and sales in comparable stores will rise 4.1 percent, according to BDO.

Online sales during the holiday season, traditionally the biggest quarter of the year for retailers, are expected to rise just 4.6 percent, according to the survey.

"I do think that the holiday season expectations on the online side are tempered, along with brick and mortar, with where is consumer confidence going to be and how the election is going to impact that," said Wyss.

Separately, the National Retail Federation said on Tuesday that it expects U.S. holiday season sales to rise 4.1 percent, slower than in the prior two years, weighed down by mixed economic data and political uncertainty.

The sixth annual BDO Retail Compass Survey of CFOs was conducted in August and September.

(Reporting by Jessica Wohl in Chicago; editing by Brad Dorfman and Matthew Lewis)

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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