Abstract

http://ssrn.com/abstract=2200420
 
 

References (34)



 
 

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'Showrooming' and the Competition between Store and Online Retailers


Amit Mehra


Indian School of Business (ISB), Hyderabad

Subodha Kumar


Texas A&M University - Mays Business School

Jagmohan S. Raju


University of Pennsylvania - Marketing Department

January 14, 2013


Abstract:     
Customers often evaluate products at brick-and-mortar stores to identify their "best fit" product, but end up buying this product not at the store but at a competing online retailer to take advantage of lower prices. This free-riding behavior by customers is referred to as "showrooming." We analyze three strategies to counter the effect of showrooming that may improve profits for the brick-and-mortar stores: (a) price matching, (b) making product matching harder between the brick-and-mortar store and the online retailer, and (c) charging customers for showrooming. We show that only the last two strategies may improve profits of the brick-and-mortar stores. We also present an analysis to illustrate when a particular strategy, (b) or (c), does better than the other.

Number of Pages in PDF File: 37

Keywords: retailing, showrooming, competition, pricing, game theory, competitive strategy

JEL Classification: L81, M31, C72, D43

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Date posted: January 15, 2013 ; Last revised: August 22, 2014

Suggested Citation

Mehra, Amit and Kumar, Subodha and Raju, Jagmohan S., 'Showrooming' and the Competition between Store and Online Retailers (January 14, 2013). Available at SSRN: http://ssrn.com/abstract=2200420 or http://dx.doi.org/10.2139/ssrn.2200420

Contact Information

Amit Mehra (Contact Author)
Indian School of Business (ISB), Hyderabad ( email )
Hyderabad, Gachibowli 500 019
India

Subodha Kumar
Texas A&M University - Mays Business School ( email )
301-F Wehner
College Station, TX 77843-4218
United States
979-845-9629 (Phone)

Jagmohan S. Raju
University of Pennsylvania - Marketing Department ( email )
700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-1114 (Phone)
215-898-2534 (Fax)

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